Stonepeak III set to hit $7bn hard-cap in early ‘18

Stonepeak Infrastructure Partners has lined up the final commitments needed to push its third fundraising to its $7 billion hard-cap, a source confirmed to Infrastructure Investor.

A group of institutional investors have signalled they will commit enough capital to push Stonepeak Infrastructure Fund III to its fundraising ceiling when they begin allotting money in 2018, the source added. The source said a “scale-back situation” is likely for investors that make commitments that push the fund past its hard-cap, meaning an investor that wants to subscribe $100 million to Fund III, for example, may have to settle for less than that.

The fund will hold an interim close on more than $6.5 billion by 15 December, the source said. Around 100 LPs have committed to Stonepeak’s new fund, more than double the institutional investors in its second fund.

Fund III reached first close in October on more than $5 billion. The fund is aiming for a 12 percent net internal rate of return inclusive of a 4 percent cash yield, according to pension documents. The vehicle offered a 1.375 percent discounted management fee and 15 percent carry for first-close investors. Those rates bump up to 1.5 percent fees and 20 percent carry for later investors, documents published by the New Jersey State Investment council show. It has an 8 percent hurdle rate.

The source told Infrastructure Investor that Stonepeak’s second fund has one more investment to make before its $3.5 billion is fully deployed, which could happen before the end of this year. In November, Stonepeak used its second fund to make its first investment in Europe – a $500 million deal for bandwidth provider euNetworks.

Fund II closed in 2016 and is generating a 31.2 percent net IRR, a 1.23 times net money multiple and has a 25 percent net debt to capitalisation, according to the New Jersey documents.

Stonepeak declined to comment.