News & Analysis

Infracapital greenfield close ‘imminent’ after £30m injection

The fund, targeting £1bn, has added the Leicestershire pension to its ranks as it nears a final close.

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Infracapital’s greenfield fund is set for an “imminent” close after the Leicestershire County Council pension fund agreed a £30 million ($39.6 million; €€34.1 million) commitment to the fund.

The pension scheme’s investment was agreed earlier this month and it noted a report from consultant Hymans Robertson advising that “final close of [the] fund is imminent”, ensuring there will be no prolonged period of fundraising. A source familiar with the fundraising told Infrastructure Investor this was expected to be the end of October or the beginning of November. The fund has a target of £1 billion following its launch in early 2016.

Infracapital declined to comment.

Leicestershire said the investment will be not be placed in its infrastructure portfolio, with the fund’s mid to high-teens return target making it more appropriate for the pension’s Opportunity Pool, although it indicated this may change in the future.

“It is also worth noting that the greenfield assets being purchased by Infracapital will evolve into brownfield assets, so in the future it may make sense to reclassify this as a lower risk infrastructure investment, thereby freeing-up capital for the Opportunity Pool,” it stated. “This point is, however, at least five years away.”

Leicestershire’s investment comes in the mid-range of commitments received by Infracapital’s fund. Fellow local authority investor Suffolk County Council confirmed its £60 million injection earlier this year while the Lincolnshire and East Riding pension funds have each invested £15 million. The fund offers discounted fees to UK local authority investors, according to Leicestershire.

The Infracapital greenfield fund’s most recent investment came last week when it acquired a further 16.1MW of solar assets in France. The portfolio also includes broadband deals in the UK and Poland. The Lincolnshire pension scheme noted in a report this month the 25-year vehicle will target eight to 15 investments, based on an equity investment in the range of £25 million to £200 million.