Landmark closes first infra secondaries fund on $915m

The vehicle has already made six investments, accounting for 51% of committed capital.

Landmark Partners has wrapped up fundraising on its debut infrastructure secondaries fund, a month after the firm said it had agreed to be acquired by Ares Management, affiliate title Secondaries Investor reported.

The Simsbury, Connecticut-headquartered firm raised $915 million for Landmark Infrastructure Partners II, according to a statement. The fund has already made six investments accounting for 51 percent of committed capital.

“Our dedicated team, coupled with commitments from strategic investors globally, positions Landmark as a leader in the infrastructure secondary market,” said chairman and managing partner Francisco Borges, adding that he expects infrastructure secondaries volumes to hit $6 billion in 2021.

The fundraise brings Landmark’s total committed capital to $28.8 billion since inception, the statement noted.

Infrastructure Partners II launched in February 2019 and was targeting $1.5 billion, according to Secondaries Investor data. Among the limited partners in the fund are North Carolina State Treasury, which committed $250 million. The fund had raised $500 million as of September 2019.

Fund II invests across the utilities, transportation, communications, renewables and energy infrastructure sectors, Secondaries Investor reported in 2019. It is targeting a net internal rate of return of between 10 percent and 12 percent and a net multiple of 1.4x.

This is Landmark’s debut infrastructure fund, and the firm has raised two 2016-vintage real assets funds. RA1a and RA1b have a combined size of $455 million.

In March, Ares Management acquired Landmark in a $1.08 billion deal, becoming the fifth strand of the credit giant’s business. As part of the deal, Landmark’s 16 partners will participate in a management incentive plan under which they have to meet targets related to fundraising and revenue generation.

Speaking on a call after the deal was announced, Ares chief executive Michael Arougheti said he expected Landmark to be able to “meaningfully grow its flagship funds” with the help of Ares’ 1,100 limited partner relationships. He also confirmed that Landmark should meet or exceed its medium-term fundraising target.

In February, the chief executive of Landmark’s former parent company BrightSphere Investment Group said the secondaries firm was targeting “north of $10 billion” across its private equity, real estate and infrastructure funds by 2022.

Secondaries buyers have increasingly directed their attention to the infrastructure market. In April, Infrastructure Investor reported that Macquarie had hired a former Strategic Partners executive to launch its push into the market.

In July, Strategic Partners held a $3.75 billion final close on its third infrastructure secondaries fund, the largest pool of capital yet raised for the strategy.

Almost 50 percent of secondaries buyers expressed an appetite for infrastructure, making it more popular than credit and real estate, according to investment bank Evercore’s 2020 survey.