Infracapital, the London-based infrastructure investment arm of M&G Investment Management, has announced an interim close of £530 million for its third fund.
Infracapital Partners II, which is aiming to achieve a final close on £900 million, has received commitments from existing and new investors in the UK, mainland Europe, North America and Asia, according to a statement.
The fund’s sole investment so far was in the £1.24 billion acquisition of Veolia UK (renamed Affinity Water), the UK’s second-largest regulated water-only utility, which Infracapital bought with Morgan Stanley Infrastructure in June 2012.
In the fund statement, Infracapital said Affinity Water had achieved a “strong first year’s performance delivering yield and valuation uplift to the fund and its investors”.
The firm added that it had a “healthy pipeline” of potential further investments and expected to complete one or two deals before the end of this year.
Infracapital II is the successor to Infracapital Partners, which closed on just over £900 million in November 2008 and was invested in the likes of port operator Associated British Ports and gas and electricity meter business Meter Fit.
Another investment from Infracapital Partners was Kelda, the owner of Yorkshire Water. In May this year, sources confirmed to Infrastructure Investor reports that Infracapital was considering selling its 13 percent stake in Kelda.
Infracapital is headed by Martin Lennon, who previously led the project and infrastructure finance business at M&G before co-founding Infracapital with director Ed Clarke.
In March this year, Infracapital appointed Stephen Nelson, the former chief executive of UK airport operator BAA, as an asset management director.