LambdaStar targets $1.5bn for debut infra fund

The New York-based firm founded by Leonard Shaykin and Jacob Frydman focuses on US infrastructure assets and targets middle-market transportation, energy, water and waste water assets.

New York-based LambdaStar Infrastructure Partners is targeting $1.5 billion for its debut infrastructure fund, according to updated data on infrastructure funds in market published by San Francisco-based placement agent Probitas Partners.

LambdaStar invests in United States infrastructure assets and related businesses and is now raising its first fund for this purpose. Target investments will include middle-market transportation, energy, water and waste water assets, according to its website. 

The firm was founded in 2008 by Leonard Shaykin, who was also founder and head of Citicorp’s private equity business and managing partner of Adler & Shaykin, a private equity firm dedicated to management leveraged buyouts, and Jacob Frydman, a New York-based, value-added, real estate investor and developer, according to the firm’s website.

Members of LambdaStar's management team declined to comment for this article.

At the New York State Infrastructure Summit last month, Frydman gave some insight into the firm’s strategy while giving a speech on the topic of organised labour’s role in infrastructure investing.

He told delegates gathered at the conference that labour unions often face a dilemma which he summarised as, “do you do well or do you do good?”

On the one hand, he said labour union leadership is often concerned that the union’s pension invest in projects that create jobs for its members, such as greenfields, or new asset developments. On the other hand, the pensions’ trustees, as fiduciaries, are concerned to invest in assets that generate current returns on pension funds. Those tend to be more brownfield, or existing assets, which often do not have the same job creation potential as greenfields. This creates a dilemma between doing good by creating jobs or doing well by earning current income for pension funds.

He said LambdaStar will seek to be “doing good while doing well” by partnering with organised labour and structuring transactions in such a way that their job creation and income generation concerns are both met.

As an example, he cited investing in a greenfield project using preferred equity as a financing tool. That way, investors can generate current yield that accrues on a project that might not see cashflows for several years but still creates jobs in the meantime.