Infranode closes debut fund on $530m, beats target by $53m

Swedish fund manager Infranode has closed its maiden infrastructure fund on SKr4.45 billion ($530 million; €446.9 million) after three years on the road.

The Nordics-focused vehicle beat its original target of SKr4 billion following the final commitment by Swedish pension fund AP4 of SKr900 million. Other investors in the fund include Swedish insurance firm Folksam (SKr1 billion), Finnish counterpart LähiTapiola (SKr200 million), the European Investment Bank (SKr900 million), as well as the Ikea-affiliated IMAS Foundation and KPA Pension.

The fund also exceeded its hard-cap of SKr4.25 billion, Christian Doglia, founding partner of Infranode, told Infrastructure Investor. Infranode I was launched in October 2014, and was said to be the first long-term infrastructure investment platform based in Sweden.

“It would have been much easier if we wanted to raise money, for example, from Asian investors or other European countries keen to invest in Nordics,” Doglia added. “Everybody is interested in the Nordics, that’s not the issue. We still wanted to keep this profile of local investments with local investors, which is what we achieved.”

The 20-year fund is targeting a high single-digit return and has made three investments so far – all in the energy space. The deals comprise Swedish district heating company Vasa Varme, solar and geothermal firm Eneo Solutions and Norwegian hydropower and district heating group Akershus Energi Varme.

Infranode was also in contention – alongside Infracapital – to acquire energy, heating and recycling firm Kemab from a Swedish municipality earlier this year. The deal was postponed with elections on the horizon, Doglia said. Infranode expects to make between 10 and 12 investments in total.

The fund has a planned mix of two-thirds brownfield deals and one-third greenfield, while 20 percent of it can be used to invest in other northern European countries outside Denmark, Finland, Norway and Sweden.