I Squared makes Bhandari CIO as co-founder Rahmathulla to exit

Co-founder and managing partner Gautam Bhandari has become I Squared Capital’s global chief investment officer as part of a reorganisation that will see co-founder and managing partner Adil Rahmathulla leave in June 2024.

Bhandari’s new role is part of a bid “to further institutionalise I Squared Capital for the coming decade and beyond”, the Miami-based firm said in a statement also announcing several promotions and the creation of executive and operating committees.

Rahmathulla’s planned transitional exit will see him remain on I Squared’s investment committees until his departure. He founded I Squared alongside chairman and managing partner Sadek Wahba and Bhandari, after they left Morgan Stanley Investment Management in 2012.

“It’s been 11 years of fantastic growth,” Bhandari told Infrastructure Investor. “The firm has grown and he wants to take on new challenges. For us, it’s a wonderful chance for a new, younger generation of partners to own the equity and continue building the franchise. That’s what happens when you’re no longer a start-up.”

Rahmathulla will be selling back his equity in I Squared, and the GP said that over 27 senior employees will be investing their own capital into the equity ownership of the firm. This is in addition to existing shareholders, which include Dyal Capital, thought to own about 20 percent of the group.

Bhandari also confirmed that Rahmathulla’s impending departure will not trigger any key person clause in its funds, stating that “no single person is a key man at I Squared”. Sources familiar with the matter have told Infrastructure Investor that key person clauses in I Squared’s funds are only triggered if two of the group’s founding partners depart.

Bhandari added: “We have been in communication with LPs. Most are extremely happy we’ve managed this transition well. We have been transparent and open about it.”

In a statement, Rahmathulla said he was “grateful to Sadek and Gautam for their partnership and friendship”, adding that he was looking forward “to continuing my journey as an investor and entrepreneur in the years ahead”.

Institutionalising I Squared

Prior to Bhandari’s new appointment, I Squared had no formal CIO role, with those responsibilities spread across its global flagship, growth markets, credit and Infratech teams. Bhandari said those fund partners will still perform those roles, but that the change “ensures better coordination”.

“[The global CIO role] formalises something I’ve been doing for quite some time,” he clarified. “It’s trying to maximise risk-adjusted returns in a cohesive way, in the five different fund strategies we have globally.”

Alongside Bhandari’s new role, partners Mohamed El-Gazzar and Harsh Agrawal have been promoted to senior partners and will join a newly formed executive committee alongside Wahba and Bhandari. London-based El-Gazzar and Singapore-based Agrawal also joined from Morgan Stanley in 2013. Andreas Moon, who was also part of the founding group from Morgan Stanley and was head of investor relations at I Squared, departed the firm last month.

In addition, the firm has also created a new operating committee to manage its operations and support its growth. That committee includes I Squared’s partners, alongside a group of senior executives. The Miami-based manager employs over 215 people, with 81 professionals hired since the start of 2022.

I Squared currently has three funds in market: ISQ Growth Markets Infrastructure Fund, ISQ Global Infrastructure Credit Fund and ISQ Global InfraTech Fund. Sources have told Infrastructure Investor that the Growth Markets vehicle has raised about $1.8 billion of its $2 billion target, the credit fund $800 million of its $1 billion target, while the infratech fund has raised around $170 million. A planned $2 billion energy transition fund is set to be launched in the coming weeks.

I Squared declined to comment on any fundraising.

The manager continues to deploy its $15 billion ISQ Global infrastructure Fund III, which closed last year and has to date committed to 20 platform investments. Bhandari said the vehicle is about two-thirds committed.