I Squared doubles fund size again to close third effort on $15bn

The group’s third fund more than doubles the $7bn raised by its predecessor, itself a more than doubling of the $3bn raised by Fund I.

Miami-headquartered I Squared Capital has completed fundraising for its third global infrastructure vehicle after closing its ISQ Global Infrastructure Fund III on $15 billion.

The 2020-vintage fund raised the capital from over 200 institutional investors across 27 countries, I Squared said in a statement. In an increasingly common trend, the fund had a target of $12 billion and an original hard-cap of $13 billion, according to pension documents seen by Infrastructure Investor.

The vehicle actually has deployable capital of $15.5 billion thanks to a $300 million GP commitment and a $200 million co-investment fund designed for smaller investors, Infrastructure Investor understands. Fund III’s size more than doubles the $7 billion raised for ISQ Global Infrastructure Fund II in September 2018, itself more than double the $3 billion raised by its maiden effort in April 2015.

The vehicle is substantially invested at close across the energy transition, transportation, digital infrastructure and supply-chain logistics sectors. Investments includes the $2 billion acquisition of GTT Communications’ telecoms infrastructure business, the take-private of London-listed portable power group Aggreko, European wind repowering platform Cube Green Energy and, most recently, cold storage infrastructure platform Cube Gold Storage.

I Squared targets gross returns of 15-20 percent and a cash yield of 6 percent, according to the pension documents. As at the end of April 2021, Fund II was generating a gross IRR of 21.5 percent and a net 17.2 percent. The debut effort was generating a gross return of 22.3 percent and a net IRR of 16.6 percent. When it came to realisations, Fund I at the time had generated 32.9 percent gross return.

Investments will take place across North America, Europe, Asia and Latin America.

I Squared is also raising ISQ Growth Markets Fund, which Infrastructure Investor understands to be targeting about $2 billion, a figure it is believed I Squared expects to reach by the end of the year. The vehicle invests in both its own individual assets as well as alongside assets from the main fund which fit within its remit.