Morgan Stanley targeting $2.5bn for new fund

Morgan Stanley Infrastructure Partners II is raising capital.

Morgan Stanley Infrastructure (MSI) has begun soliciting investment capital for a fund with a goal of raising $2.5 billion, Infrastructure Investor has learned.

The fund is named Morgan Stanley Infrastructure Partners II (MSIP II). MSI, part of Morgan Stanley Investment Management (MSIM) and the $4 billion infrastructure investment platform of Wall Street firm Morgan Stanley, conceived MSIP II in the fall of 2012.

A person familiar with MSI confirmed MSIP II has a $2.5 billion fundraising target, noting Morgan Stanley is not using an external placement agent. Matt Burkhard, a spokesman for Morgan Stanley in New York, declined to comment.

Flagship infrastructure offering Morgan Stanly Infrastructure Partners I (MSIP I) came to be in 2008, and is a heavyweight fund in the global asset class, while MSI itself is ranked No. 19 on the Infrastructure Investor 30 ranking. 

In 2012, MSIP I became full owner of Southern Star Central Corporation, then in June paid $1.9 billion for 90 percent of water and wastewater service Veolia Environment.

Then, last August, the fund bought a majority stake in Continuum Wind Energy for $210 million and in September MSIP I added $150 million to its existing $150 million in Zhaoheng, a water power concern in China.  

In 2012, Adil Rahmathulla, executive director for America, and Gauntam Bhandari, a managing director for Asia, left MSI.

A year prior, MSI lost global head of infrastructure Sadek Wahba, and Vincent Policard, an investment professional focused on Europe.