Morgan Stanley’s latest infra fund reaches $1.95bn

MSI is halfway towards reaching the $4bn target for its second infrastructure vehicle which it renamed in April to comply with the Volcker Rule.

Morgan Stanley Infrastructure (MSI), the infrastructure investment arm of Morgan Stanley, the Wall Street investment bank, has to date raised $1.95 billion for North Haven Infrastructure Partners II, according to a Securities and Exchange Commission (SEC) filing.

Launched in 2013 under the name of Morgan Stanley Infrastructure Partners II (MSIP II), the fund, which has a target of $4 billion, reached a first close on $1.5 billion in June 2014.

Morgan Stanley declined to comment on the name change this time round. In a press release issued last April, however, the firm said it was changing the name of all covered funds in order to comply with regulations.

“The Volcker Rule section of the Dodd-Frank Act requires certain changes to banks’ sponsorship of private investment funds, including the requirement that banks not include their own name as part of the name for these funds,” Morgan Stanley’s Merchant Banking and Real Estate Investing division, to which MSI belongs, said then in a statement.

“In line with this regulatory requirement, Merchant Banking & Real Estate Investing will adopt North Haven as the new name for its closed-end strategies across private equity, real assets and credit,” the investment bank added. According to the statement, the North Haven name is in reference to the location in Maine where Morgan Stanley’s original partners met and founded the firm nearly 80 years ago.

Under the Volcker Rule, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, banks are no longer allowed to invest more than three percent of their own capital in in-house private equity and hedge funds, a significant reduction from the 10 percent previously permitted.

This was done in an effort to limit banks’ investment activities, particularly in light of the 2008 Global Financial Crisis.

Morgan Stanley is not the only bank to have changed the name of its funds. US investment bank Goldman Sachs is currently raising capital for West Street Infrastructure Partners Fund III, the successor to Goldman Sachs Infrastructure Partners II, which the firm closed in 2010 on $3.1 billion. Its latest infrastructure offering is reportedly targeting $3 billion. West Street is in reference to Goldman Sachs’ global headquarters, located in New York City’s financial district.

Goldman Sachs did not respond to a request for comment.