Canada-based infrastructure debt specialist Stonebridge Financial Corporation is hoping to build on the success of its debut fund, a 2012 vehicle which raised $201 million, by launching a follow-up.
Stonebridge Infrastructure Debt Fund II has a target of $300 million, and will invest in fixed rate, senior construction and or take-out debt financings on a private placement basis. Minimum credit ratings will be BBB-, the firm said.
It will be used to underwrite infrastructure projects that are “essential in nature to local communities or regional or national populations and are expected to generate relatively stable and predictable cashflows over the long term”. The types of assets on which it will focus include social infrastructure (such as universities, hospitals, care facilities, schools, roads, airports and waste management systems), and energy-related infrastructure projects.
Stonebridge is hoping to raise at least $300 million, and hopes to hold a first close this December, with a final close to follow 12 months later.
Investors in the firm’s first fund include the Business Development Bank of Canada, Teamsters Canadian Pension Plan and six other Canadian pension funds.
“Given the current volatility in the equity markets and interest rates that remain at historical lows, Stonebridge believes that private infrastructure debt is an ideal asset class providing institutional investors with incremental yield, portfolio diversification, credit enhancement and liability matching characteristics not otherwise available in the public fixed income market,” the firm said in a statement.