HSBC Specialist Investments, the bank’s dedicated infrastructure and real estate unit, has reached the first close for its fourth infrastructure fund for greenfield, or new development assets.
The fund has closed with $580 million in commitments from a small number of institutional investors who had already invested in other funds of the specialist investments unit, according to a statement from the unit. It is targeting a final close of $1 billion and returns of 15 percent per year.
HSBC Infrastructure Fund III is looking to invest in greenfield projects across the globe, focusing on public-private partnerships with low revenue risk, including social infrastructure and transportation projects in developed markets. It seeks to achieve capital gain from the realisation of assets once they have finished construction and establish a proven operating record.
The fund is already looking at several investments and is currently the preferred bidder on a government accommodation project in Canada and the Singapore National Sports Hub. It is also involved in other projects at tender stage including road, rail, healthcare and accommodation projects in Europe, North America and Asia.
HSBC’s infrastructure unit comprises a 26-strong team based in London, Hong Kong, New York and Paris. It has invested over $15 billion through 50 infrastructure investments across its 15 years in operation. It raised HSBC Infrastructure Fund I in 2001, HSBC Infrastructure Fund II in 2005, which is fully invested in 22 projects, and it recently raised the HSBC Environmental Infrastructure Fund, its third greenfield fund.