Infranode nearly triples size of debut with €1.2bn Fund II close

Just over half the capital was raised from Nordic LPs but the region-specific fund also drew investment from outside the region for the first time.

Swedish fund manager Infranode has closed its second fund on its hard-cap of €1.2 billion, nearly three times the size of its maiden effort.

Infranode II was launched towards the end of 2019 with a target of €1 billion. It hit that milestone in March, though the the firm originally envisaged reaching it in January, before the outbreak of covid-19, Christian Doglia, founding partner and chief executive of Infranode, told Infrastructure Investor.

The fund, which targets investments in Europe’s Nordic region, secured initial commitments from Swedish investors Folksam, KPA and the IMAS Foundation. Finnish pension Keva and Norway’s Storebrand were among other LPs to ensure just over half the fund’s 19 investors were based there. Unlike Infranode’s first fund, after securing €517 million at first close from Nordic LPs, Fund II also raised capital from investors outside the region, including UK-based pension pool Border to Coast.

“UK and German investors are very close to the Nordics in terms of mindset, long-term focus and sustainability outlook,” Doglia explained. “They like our Nordic focus and Nordic expertise. We are specialised and can deliver that stable return over time and fixed income replacement. It has shown it can do that during the corona crisis.”

Infranode II has a 25-year term and targets high single-digit returns, Doglia added. It has agreed or completed four deals, including in the port of Oslo and Fortum’s district heating business in Finland, amounting to about 20 percent of the fund. Infranode plans to agree one or two further deals before year-end.

Unlike the first, Infranode II was euro-denominated. The maiden Swedish kroner-denominated vehicle raised Skr4.45 billion ($522.5 million; €438.9 million) in December 2017. Infranode was founded in 2014.