I Squared in strategic partnership with Mitsubishi

New York-based fund manager I Squared Capital (ISQ) and Japanese business conglomerate Mitsubishi Corporation have formed a strategic partnership that will see the two collaborate in infrastructure investment, Mitsubishi said in a statement.

“The partnership basically means that Mitsubishi will be providing deal sourcing, operational expertise and engineering expertise in Asia, as well as globally,” a source told Infrastructure Investor.

Mitsubishi also announced that one of its subsidiaries has committed $100 million to ISQ Global Infrastructure Fund, the firm's debut vehicle. Launched in September with a target of $2 billion, the fund will aim to invest in infrastructure assets globally. Infrastructure Investor reported in June that ISQ had raised $1.2 billion towards the vehicle.

ISQ was created in 2012 by former executives of Morgan Stanley including Sadek Wahba, Gautam Bhandari and Adil Rahmathulla. It specialises in energy, utilities and transport in the US, Europe and select high-growth markets.

The firm has already realised a few investments, including the acquisition of DTE CoolCo, a district chilling system in Cincinnati, Ohio and an investment in Kendall Green Energy, a 256-megawatt co-generation facility, near Boston. Both investments were made through its debut fund.

Mitsubishi has been active in the infrastructure sector through its various lines of business – from building turbines and operating infrastructure assets globally to investing in other, major infrastructure funds.

In April 2012, it became a member of the Global Strategic Investment Alliance (GSIA) by committing $1.25 billion as part of a consortium that includes the Japan Bank for International Cooperation, Mizuho Corporation, and the Pension Fund Association. GSIA is an unlisted co-investment infrastructure fund set up by the Canadian pension Ontario Municipal Employees Retirement System (OMERS) with a target size of $20 billion.

“MC [Mitsubishi] through its wholly-owned subsidiaries, manages Japanese investors’ capital through the [GSIA] alliance,” Mitsubishi said. “Our strategic partnership with ISQ further enhances these initiatives.”

One of Mitsubishi’s subsidiaries includes Mitsubishi Corporation Asset Management, which according to the statement, “is developing methods to enable Japanese institutional investors to invest in infrastructure, where demand is strong and growing.”