Infranode receives initial investments as it eyes €1bn for fund II

Commitments from two Swedish investors have brought the fund’s value to just under €300m, with an additional €90m from the EIB expected imminently.

Swedish fund manager Infranode has received initial investments for its second fund, which is targeting €1 billion.

Compatriot insurance group Folksam announced it had invested SKr1.5 billion ($307 million; €279 million) to Infranode II, with Folksam Life contributing SKr630 million of the total; the group’s non-life insurer Folksam Sak contributing SKr150 million; and KPA Pension, a Folksam affiliate, providing the largest portion in the amount of SKr720 million. The IMAS Foundation, an investment group affiliated with retailer IKEA, also committed SKr1.5 billion to Infranode II.

While the investments have been disclosed in Swedish kronor, the fund is a euro-denominated vehicle, in what is the main difference between Infranode II and its predecessor, which closed on SKr4.5 billion in December 2017. The change is thought to be motivated by a desire to have uniformity among its commitments, Infrastructure Investor understands.

The strategy is otherwise unchanged and the fund will target investments in energy, transport, telecoms and social infrastructure across the Nordics, with a 20 percent headroom to invest outside the region and targeting an IRR in the high single digits. Infrastructure Investor, which had reported in February that the Swedish manager was planning to launch an up to €1 billion fund in the second half of 2019, understands there is no hard-cap for the fund at this stage, although it’s possible one might be set at a later date. Investments from the first fund include a portfolio of care homes, rehabilitation centres and pre-school facilities in Norway; and Swedish solar and heating group Eneo Solutions.

Both Folksam and IMAS are re-up investors. The European Investment Bank, which invested in Infranode’s first fund, is expected to resume its participation in Fund II with a €90 million commitment to be made in the near future, a source said.

Infranode declined to comment.

AP4, an investor in Infranode I, earlier this year teamed up with fellow pension funds AP1 and AP3 to launch their own infrastructure investment company Polhem Infra. The new firm, which is armed with SKr9 billion to invest primarily in Swedish infrastructure, made its first investment last week, acquiring a 21.5 percent share in district heating company Solör Bioenergi, which operates in Sweden, Norway and Poland.