ORIX launches $200m infra and tech fund

The fund will focus on investments in public infrastructure and early-stage technology projects in the state of Texas. ORIX said it could eventually increase the size of the fund.

Texas-based financial services firm ORIX USA has launched its first infrastructure fund, a $200 million vehicle that will invest in public infrastructure in Texas as well as early-stage technology projects.

All capital for the fund, called the Texas Technology and Infrastructure Fund, will come from ORIX, according to Andrew Garvey, managing director for ORIX Municipal Finance. The fund is not raising capital from outside investors, he said.

ORIX said in a statement that the fund grew out of a drop in state funding  for the Texas Emerging Technology Fund, which backs venture-stage technology investments at universities and companies across the state. ORIX said it was well-positioned to  “step into the void” left by the decrease in state funding.

Garvey said that ORIX then “broadened the mandate to also pursue and invest in more public sector infrastructure-type investments” including roads, water and wastewater treatment plants, and social infrastructure.

“The theme behind it, both parts of the fund, is that they are segments of the economy that are struggling to find cost-effective financing and ORIX already has expertise in those areas,” Garvey said.

Garvey said the fund is not required to invest specific allocations in either technology or infrastructure, and he said the fund could grow beyond its current size if ORIX finds the potential for more investment opportunities.

Garvey did not rule out the possibility of investing outside Texas in the future, but empahsised that the fund’s current focus is on Texas.

He said Texas’ Regional Centres for Innovation and Commercialisation (RCICs), six regional agencies that identify opportunities for investment in technology ventures, “are important parts of the fund”. He said the RCICs “ have a local knowledge of the needs and the unfunded projects out there”.

ORIX has been attempting to expand its municipal finance programme over recent months. Garvey joined the firm earlier this year following positions at Morgan Stanley, Lehman Brothers, Cain Brothers and Paine Webber, according to a statement. Garvey said the fund is “another extension of ORIX’s goal to grow investments in that sector”.

ORIX USA is a subsidiary of Tokyo-based financial services firm ORIX Corporation, which is listed on the New York and Tokyo stock exchanges. The firm holds $6 billion in assets and manages third-party assets worth $23 billion, according to a statement.