Horizon21 eyes second infra fund of funds

The Swiss alternative investment manager will launch the vehicle in 2010 after deciding earlier this year not to extend the fundraising timetable for its first infrastructure fund of funds.

Swiss alternative investment manager Horizon21 is planning to raise its second infrastructure fund-of-funds next year, InfrastructureInvestor has learned.

Serge-Alexandre Lauper, Horizon21’s head of infrastructure, said the firm employs a “programme approach” to investing, whereby every two years it raises a new fund for its various investment platforms, which include hedge funds, private equity and infrastructure, among other strategies.

The decision to raise a new fund next year also coincides with the decision not to extend the fundraising period for its current infrastructure fund of funds. The fund, H21 Infrastructure I, reached a first close on $470 million in March 2008 and had a further 12-month fundraising horizon ending in March 2009 that could  have been extended for another 12 months with the consent  of the existing limited partners.

“Given the market environment and other considerations internally, we decided to close it,” Lauper said.

“We plan to raise a successor fund next year, with a somehow more conservative investment strategy and no exposure to assets which were bought at a high price or were aggressively leveraged”, he added, referring to the pre-crisis period when many fund managers bid very high prices for  “trophy assets”  which are now suffering from pressures to deleverage.

Lauper said H21 Infrastructure I is now almost fully committed.

Asked about what the future holds for infrastructure fund fee structures – a hot topic of debate in the industry – Lauper said that “there is clearly a movement toward lower fees”.

“We believe long-term infrastructure returns do not justify the kind of fee level we have seen in the past. Our strategy is to structure our fund and build our portfolio in such a way that investors can realistically get a net return in the 10 to 12 percent range,” Lauper added.

Founded in 2004, Horizon21 expanded its platform into infrastructure in 2007. Lauper was hired to head its infrastructure investment group in 2008. The firm primarily manages money for pension funds and insurance companies in German-speaking countries. It is based in Pfäffikon, Switzerland.

Germany’s Sal Oppenheim Private Equity Partners launched a €300 million infrastructure fund of funds earlier this year, as previously reported by InfrastructureInvestor.