Pacific Equity Partners raises $434m for new infra fund

The Sydney-based fund manager is on track to hit fundraising targets for its first dedicated infrastructure vehicle.

Pacific Equity Partners’ Secure Assets Fund has reached A$600 million ($433.7 million; €381.3 million) on its way to a target of A$750 million.

The fund, PEP’s first vehicle focused on the infrastructure sector, reached a first close earlier this year on around A$400 million and has a hard-cap of A$1 billion. The fund is now conducting a “rolling close”, with a final close likely to take place in Q2 2019, a source familiar with the matter told Infrastructure Investor.

PEP began marketing the fund to investors in February this year. It aims to generate returns in the mid-teens, lower than traditional private equity funds that often target returns of 20 percent or more, but higher than traditional core infrastructure.

The Australian fund manager hired former AMP Capital head of infrastructure for Australia and New Zealand Paul Foster as a managing director in 2017 to work with the firm’s existing leadership team to develop its infrastructure strategy.

The Secure Assets Fund has already completed its first investment, with the iHUB smart metering business. iHUB was formed after PEP simultaneously acquired subsidiary businesses from two separate large corporations, Switzerland-listed energy management company Landis+Gyr and Australian energy retailer Origin Energy.

The acquisition of Origin Energy’s Acumen smart metering business was announced in May and cost A$267 million.

PEP said it was “actively engaged on a number of additional investment opportunities” across various sectors including energy, utilities, transportation, logistics, telecommunications and health. The fund was set up to target opportunities in Australia and New Zealand that feature a combination of secure and predictable revenue streams as well as compelling growth and operational enhancement opportunities, according to PEP.

PEP said it expects to announce further investments for the Secure Assets Fund in due course.

“We are excited about this space, which sits between traditional infrastructure investment, where I have spent the last 18 years, and the type of performance and growth initiatives which are the hallmark of PEP traditional investments,” Foster said in a statement.