Harrison Street to launch $750m energy transition fund – exclusive

The fund marks the real estate investor’s second foray into infra, after its evergreen social infra vehicle.

Chicago-based Harrison Street is set to launch its first-ever energy transition-focused vehicle, targeting $750 million, Infrastructure Investor understands.

Eyeing low- to mid-teens returns for its value-add strategy, sources said the closed-end fund’s first close can be expected this year, any time before the end of Q4. This will then impact the date of the final close, which as of now remains in flux.

A majority of the fund’s portfolio will lie in renewable energy infrastructure – perhaps even 50 percent. The rest of the assets will then be in clean heating and cooling, EV charging infrastructure, carbon capture, renewable fuels and microgrids, amongst other things, Infrastructure Investor understands.

Harrison Street declined to comment for this story.

The real estate asset manager is no stranger to the world of infrastructure, though it has historically only operated in the social infrastructure space. Its open-ended Harrison Street Social Infrastructure fund works with universities to build out student housing, decarbonise campuses and operate university utility systems. Health systems and government entities are also among the outfits it seeks to partner with to help provide capital solutions to tackle deferred maintenance, decarbonisation and resiliency, according to its website.

“More than ever, it is imperative for global businesses to embrace clean energy and sustainable construction initiatives,” Carolyn Arida, managing director and head of utilities, states on the firm’s website. “Harrison Street is committed to delivering mission critical infrastructure assets and renewable energy options that contribute to the sustainability and resiliency goals of the businesses, partners, and communities in which we invest.”

The evergreen social infrastructure fund has raised over $4.4 billion since its inception in 2018, according to Infrastructure Investor data.

The firm is the latest in a series of real estate firms looking to further their exposure to the infrastructure space worldwide. Most recently, in the US, Arch Street Capital Advisors launched its infrastructure business earlier this month.