The investment was confirmed by the insurance company at its investor conference last week, representing 5 percent of the group’s £193 million seeding commitments this year, although it is believed that this could be increased in the future. The new fund is in the early stages of fundraising and is understood to be targeting about £1.5 billion.
Infracapital declined to comment.
It is the third in Infracapital’s series of funds targeting core infrastructure assets across Europe, beginning with its £908 million vehicle launched in 2005 and realised in September. The second instalment, which closed in 2014 on £1 billion with an additional £300 million for co-investment, is displaying an IRR of 20.6 percent, Prudential also revealed.
The 12-year fund has made eight investments so far and has already realised one in Affinity Water, which it sold to Allianz, DIF and HICL for an enterprise value believed to be about £1.56 billion. Infracapital paid an enterprise value of £1.24 billion in 2012 alongside Morgan Stanley for the UK water company.
Last week, Infracapital closed its maiden greenfield fund on £1.25 billion following a two-year fundraising period. The fund is 43 percent invested and is targeting returns in the mid to high teens.