News & Analysis

Re-ups push Partners Group’s latest fund to $2bn first close – exclusive

The global fund manager is targeting 8-12% net returns for what is shaping up to be its largest infrastructure fund yet.

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Global fund manager Partners Group has held a $2 billion initial close on the firm’s latest infrastructure investment vehicle, according to sources familiar with the fundraise.

Partners Group Direct Infrastructure 2020 – which launched at the end of last year with a $5 billion fundraising target – is on pace to be the firm’s largest fund dedicated to infrastructure, the sources said. Most of the investors that have committed capital so far have been limited partners in previous Partners Group funds.

Partners Group traditionally invests in assets or platforms through multiple vintages of its infrastructure offering, as well as through different private markets funds. For its newest vehicle, the firm is targeting net returns between 8-12 percent, or mid-teen gross returns, for infrastructure assets in sectors such as energy, communications, utilities and transport, and in markets including Europe, North America and Asia-Pacific.

Last week, during an earnings call with shareholders, Partners Group co-chief executive David Layton said the firm’s private infrastructure portfolio has “significantly outperformed” public benchmarks and other private infrastructure portfolios. Layton said the portfolio has been insulated from recent market volatility “mainly due to the fact that it has minimal exposure to commodity prices, GDP or traffic volumes”.

“It is instead characterised by a heavy overweight in long-term or take-or-pay arrangements with creditworthy counterparties, broad diversification across sub-sectors, and a concentration on essential services,” Layton said on the call.

The predecessor vehicle to Partners Group Direct Infrastructure 2020 is a 2016 vintage fund, which closed on €2.2 billion in February 2018. Investments from the 2016 fund include the 750MW Borssele IV offshore wind farm in the Netherlands; US midstream energy group Raven; and High Capacity Metro Trains, a project to design and deliver 65 trains to the State of Victoria in Australia.

Partners Group declined to comment for this story.