I Squared raises over $10bn from 100 LPs at year’s end – exclusive

The US-based firm ended 2020 with more than $9bn committed to its latest flagship fund and nearly $1bn committed to a new emerging markets vehicle.

I Squared Capital collected more than $10 billion in capital commitments for its ongoing fundraising efforts, according to a source familiar with the matter.

The US-based infrastructure manager last week held a first close on over $9 billion in commitments for its third flagship investment vehicle, ISQ Global Infrastructure Fund III, the source confirmed to Infrastructure Investor. Separately, the firm also closed on nearly $1 billion for its inaugural emerging markets-focused vehicle, ISQ Growth Markets Fund, which is targeting $2 billion.

So far, more than 100 investors across global markets have committed to I Squared’s fundraises, the source said.

I Squared is pursuing a dual strategy with the firm’s flagship global vehicle, which launched during the first half of 2020 and is targeting $12 billion. The first is a mid-market platform-building approach, with mid-market defined as equity values of less than $500 million and EBITDA values of less than $150 million. The second strategy is more opportunistic with the fund and its co-investors targeting larger investments with an element of distress or pricing dislocation. The fund will generally seek a controlling interest in each investment. Fund III will target approximately 15 to 20 equity investments in the range of $200 million to $1 billion, according to public pension documents.

The first deal from Fund III came last October, when I Squared agreed to the purchase of European and North American data centres and trans-Atlantic fibre cables from US-based company GTT Communications for $2.15 billion.

ISQ Growth Markets Fund, its emerging markets-focused vehicle, is a first for I Squared. The manager is planning to invest it alongside Fund III, mostly in assets located in Asia and Latin America.

I Squared is also raising its first infrastructure debt fund, after receiving $800 million last September for a dedicated strategy targeting mid-market mezzanine-level infrastructure and seeking 7-10 percent gross returns.

I Squared was founded in 2012 and has raised and invested two global infrastructure funds. Fund I closed on $3 billion in 2015 and Fund II closed on $7 billion in 2018.