Morrison & Co has reached a third and final close of approximately A$580 million ($414 million; €353 million) on its Growth Infrastructure Fund, falling significantly short of its target of A$1 billion.
The fund was launched in 2018 with a A$150 million commitment from the Clean Energy Finance Corporation, one of the few instances where the CEFC has made an equity investment in an infrastructure fund.
Infrastructure Investor understands that Morrison & Co was forced to scale back its fundraising ambitions due to coronavirus, with all the capital raised for the third and final close coming during the pandemic. The amount raised in this close was not disclosed.
Morrison & Co declined to comment for this story, although Infrastructure Investor understands that the firm is pleased with the commitments it has secured given the current market environment.
MGIF is a 12-year closed-end fund that will acquire core-plus-type assets with high growth potential such as hospitals, retirement housing, student accommodation, data centres and renewable energy assets, and is targeting returns of 13-15 percent per year.
Morrison & Co chief investment officer Paul Newfield told Infrastructure Investor at the fund’s launch that it intended to introduce science-based emissions targets for the fund’s portfolio, although MGIF is not classified as a sustainability-focused vehicle.
“Infrastructure is a big contributor to carbon emissions and infrastructure managers have probably been less active in this space than some of the more advanced property managers,” he said. “We believe decarbonisation of assets will enhance the risk-return profile and appeal to investors. It will also help us generate stronger returns as assets will be more attractive to end customers.”
The fund has made three investments to date: Galileo Green Energy, a European renewable energy developer, owner and operator that was established in February 2020 and is headquartered in Italy; Sundrop Farms, a 20-hectare integrated energy, water and greenhouse facility that produces truss tomatoes, was purchased in April 2019 and is located in Port Augusta, South Australia; and Flow Systems, a business that designs, builds and operates community-based water infrastructure networks in New South Wales and Queensland, providing a substitute to residents of new communities with drinking and wastewater services on a pricing parity basis with public infrastructure.
MGIF has a commitment to deploy 75 percent of its AUM in Australian assets but can make investments in other OECD countries.
Morrison & Co reached total funds under management of approximately A$15 billion as of June 2020. It also manages Utilities Trust of Australia, one of the country’s oldest infrastructure funds that was previously managed by Hastings Funds Management, and the Public Infrastructure Partners Fund series that invests in public-private partnership assets.