I Squared nears $2bn target for Growth Markets fund – exclusive

I Squared has raised $1.7bn to date for the fund, having last week received a $150m commitment from the Florida State Board of Administration.

I Squared Capital has raised just over $1.7 billion for its ISQ Growth Markets Infrastructure Fund, nearing its $2 billion target, Infrastructure Investor understands.

The Miami-based manager last week received a $150 million commitment to the fund from Florida State Board of Administration. The LP joins other investors such as the Employees Retirement System of Texas, which allocated $100 million towards the end of 2021, while the Asia Infrastructure Investment Bank injected $150 million into the vehicle in January 2021.

Infrastructure Investor understands that the fund is likely to close by the end of Q1 2023, having already committed or earmarked about 70 percent of the fund’s size to a portfolio of seven assets. ISQ Growth Markets targets deals in Asia and Latin America, investing both alongside I Squared’s flagship infrastructure funds, while also deploying capital on its own into deals of less than $100 million. It targets gross returns of 15-20 percent.

About two-thirds of the capital deployed so far has been tilted towards deals in Asia, including commitments towards I Squared’s Cube Highways platform in India; Formera Senior Care, an elderly care investment in Taiwan; AG&P City Gas, which is building gas distribution networks in India; and BDx II, a pan-Asian data centre platform.

The fund has also invested alongside ISQ Global Infrastructure Fund III to acquire KIO Networks, the largest data centre operator in Mexico, and the vehicle is invested in SPRB Group, one of the largest port terminal operators in Colombia. Aggreko, a supplier of power generation and temperature control equipment, rounds out the fund’s seven assets.

Additional credit

I Squared also continues to be in market with its ISQ Global Infrastructure Credit Fund. Tom Murray, the team’s former managing director, left the firm in February following “differing views” on the strategy. Murray’s departure was also followed by that of three other managing directors in the equity business.

David Rosenblum, formerly a managing director with Deutsche Bank for over 16 years, joined I Squared in June as a senior managing director and fund partner for the credit business. The fund is now believed to have raised about $800 million, ahead of its $1 billion target, having raised about $670 million at the end of last year. It is also understood to have made five deals since Murray’s February departure.

Last month, I Squared hired David Whitcher as a managing director focused on power and utilities investments on the equity side, in a month which also saw its third flagship fund invest in VLS Environmental Solutions, a North America-focused environmental waste, cleaning and repair services group.

In April, the Miami-based manager closed its third vehicle, ISQ Global Infrastructure Fund III, on $15 billion, more than double the size of its predecessor. The flagship is one of four infra mega-funds to have closed during the first half of this year, which has seen a record $113 billion raised.