Fundraising

ING stops fundraising for €1bn European Infrastructure Fund

The firm blamed ‘a combination of market conditions, concerns over achievable critical mass and our strategy for taking the business forward’ as key reasons behind the decision. The fund had secured commitments from Ahold Pensioenfonds and the London Pension Fund Authority.

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ING Real Estate, an asset management unit of Dutch financial services firm ING Real Estate, has discontinued fundraising ING’s €1 billion European Infrastructure Fund (EIF), according to a statement issued by the firm.

The firm said in a statement it decided to discontinue marketing the fund “due to a combination of market conditions, concerns over achievable critical mass and our strategy for taking the business forward”.

ING added that it still finds infrastructure to be a sound investment and “will be working with the prospective investors to see whether there are any other options for providing them with an opportunity to access the infrastructure market”.

ING is at least the third European fund sponsor to cease fundraising for an infrastrucutre fund in recent months. The Bank of Ireland recently stopped fundraising for its debut infrastructure fund, which had secured £80 million (€93 million; $131 million) in commitments. A fund managed by Spanish bank Santander, the Santander Infrastructure Fund II, is also winding up its €1.5 billion fundraising effort after securing less than half that amount, according to Reuters.

ING Real Estate launched the EIF in May 2008. A statement issued at the time said the EIF would be open to institutions with a minimum €10 million to invest and would target €1 billion in total commitments.

Prior to ceasing marketing, the fund had won commitments from two large European pension investors: Ahold Pensioenfonds, the €2.2 billion Dutch corporate pension fund of Dutch retailer Ahold, and the £3.6 billion (€4.2 billion; $6 billion) London Pension Fund Authority, a local government pension scheme provider in London, according to fundraising database InfrastructureConnect.

At the time of its launch, the fund acquired two seed assets: a 24.9 percent stake in Q7, an offshore wind farm project on the Dutch continental shelf, and a 29 percent interest in the Appia consortium, owner of an operator of motorway service stations in England. It set a target of 10 percent internal rates of return for future acquisitions.

ING’s Richard Games served as chief executive officer of the fund.

An ING spokesperson declined to comment further.