Stonepeak targets $2.5bn for Fund II

The US firm's debut vehicle closed on $1.65bn less than two years ago thanks to commitments from Washington, New Mexico, Oregon and Virginia pensions.

Stonepeak Infrastructure Partners, a New York-based private equity firm, has begun fundraising for its second infrastructure vehicle with a target of $2.5 billion.

The target is more than double the $1 billion total Stonepeak aimed for and exceeded when raising Stonepeak Infrastructure Fund I, its debut vehicle, which closed on $1.65 billion in October 2013.

A source close to the matter told Infrastructure Investor that the new fund will, like its predecessor, target North American infrastructure investments in sectors including midstream oil and gas, renewable power, water, electric utilities and transportation. The focus will be on the mid-market – that is companies or projects requiring equity investments of between $50 million and $200 million.

Stonepeak was established in 2011 and launched its first fund the same year. According to people with knowledge of the firm, part of its success in exceeding the $1 billion target of its first vehicle owed to the fact that Michael Dorrell and Trent Vichie, its founders, co-headed Blackstone Infrastructure Partners before creating their own company.

“Although the firm is new, staff has known the founders since 2008 when they were at Blackstone,” the Washington State Investment Board’s Private Markets Committee stated in a meeting document when it recommended an investment of up to $250 million in September 2012.

According to Infrastructure Investor Research & Analytics, other institutional investors in the first fund included TIAA-CREF, the New Mexico Educational Retirement Board, the Oregon Public Employees Retirement Fund and the Virginia Retirement System.

Earlier this week, Stonepeak announced a partnership with Digital Bridge Holdings, a communications infrastructure platform based in Boca Raton, Florida. The two firms agreed to acquire ExteNet Systems, an owner and operator of small wireless towers, through a $1.09 billion recapitalisation.

A source with knowledge of the deal told Infrastructure Investor on Monday that Stonepeak is funding $405 million of the purchase price through Stonepeak Infrastructure Fund I, while Digital Bridge is providing $305 million of the purchase price. The remaining $375 million will come from a bank syndicate in the form of debt financing.

Stonepeak declined to comment on fundraising efforts.