Stonepeak doubles predecessor to close Fund IV on $14bn

As with the firm’s $7.2bn Fund III, the vehicle closed at a raised hard-cap due to oversubscription.

Stonepeak announced Wednesday the closing of its fourth infrastructure fund – Stonepeak Infrastructure Fund IV – at $14 billion, nearly doubling the size of Stonepeak Infrastructure Fund III, which closed at its hard-cap of $7.2 billion in 2018. 

This comes after the firm raised its original hard-cap of $12 billion for the fund at the end of last year, as revealed by Infrastructure Investor, having sailed past its $10 billion target. Such a move was not unprecedented for the firm, with aforementioned Fund III lifting its cap from $7 billion in 2018 to cater to last-minute investors. 

The LPs in question for Fund IV are globally diverse, hailing from 23 different countries, and 43 percent of the more than 150 investors are new to Stonepeak, the firm said in a statement.  

While the fund is primarily focused on North America, it can also invest in Latin America and Europe in the communications, transport and logistics, and energy transition sectors. So far, 40 percent of all capital committed has been deployed in the form of 10 investments, including DELTA Fiber and Astound Broadband. Digital infrastructure is anticipated to continue to be a major part of the fund’s portfolio, with the sector believed to comprise nearly half of Stonepeak’s current $46 billion of assets under management. 

As with its predecessor funds, Stonepeak is targeting a gross IRR of 15 percent and a net return of 12 percent. As of the end of Q3 2021, Fund III was generating a net IRR of 24.2 percent and a money multiple of 1.46x, while Funds II and I were generating returns of 14.2 percent and 10.2 percent, respectively, and respective multiples of 1.48x and 1.2x, according to figures from the Oregon Public Employees Retirement Fund, which has committed $500 million to Fund IV. 

Other known investors in Fund IV, according to Infrastructure Investor data, include the New York State Common Retirement Fund ($250 million), the Teachers’ Retirement System of the State of Illinois ($250 million) and the Teacher Retirement System of Texas ($200 million). The largest known commitment – $700 million – came from the Washington State Investment Board.

The close solidifies Stonepeak’s place among the mega-funds of infrastructure, which increasingly dominate the space and which saw EQT close its fifth vehicle on €15.7 billion late last year.  

Stonepeak remains on the fundraising trail with its maiden APAC vehicle – Stonepeak Asia Infrastructure Fund – which reached a $1.4 billion anchor closing in October ahead of its $3 billion target.   

Stonepeak declined to comment on the closing beyond its statement.