First look

DigitalBridge’s third flagship fund to target $8bn
DigitalBridge has set a target of $8 billion for its third flagship fund, DigitalBridge Partners III, The Pipeline understands.

During the firm’s Q4 2022 earnings call, CEO Marc Ganzi revealed 2023 plans include the launch of of the vehicle, but did not reveal its size. He did, however, say the firm was aiming for an “$8-plus billion” fundraising target, thought to encompass DigitalBridge Partners III, as well as its core and credit strategies.

DigitalBridge declined to comment on the target for the third fund.

Perhaps recognising the tough fundraising environment, Fund III’s target is less than it raised for its previous effort. DigitalBridge Partners II, closed on $8.3 billion in December 2021, but was originally targeting $6 billion.

DigitalBridge expects an 80 percent re-up rate from LPs in its second fund – though Ganzi said on the call that, due to the denominator effect, he expects those cheques to be 20-30 percent smaller than those written for DigitalBridge Partners II. As a result, the firm has reached out to about 200 potential new investors, he added.

NextPower UK ESG raises hard-cap to £1bn
Solar specialist NextEnergy Capital has increased its hard-cap after surpassing its initial £500 million (€567 million; $599 million) target for its NextPower UK ESG fund.

The vehicle has now raised £595 million to date and, due to increased investor demand, the UK-based firm increased its £750 million hard-cap to £1 billion. It has deployed “over £200 million in investment value”, managing director and head of investor relations Shane Swords told The Pipeline.

NPUK ESG, a 10-year fund which classifies under Article 9 of the EU’s Sustainable Financial Regulation Directive, invests in greenfield subsidy-free solar projects, with PPAs, in the UK. It has acquired five utility-scale solar projects totalling 269MW.

Investors in the 10-year fund include Border to Coast Pensions Partnership as well as the UK Infrastructure Bank, which has fully committed £250 million. The fund has also secured commitments from LPs based in Japan and the Gulf states, Swords said.

Who would have thought the UK sun would be so attractive?

One door closes, another opens for Danish offshore wind
A full 9GW of offshore wind capacity could be auctioned off in Denmark this year, subject to political negotiations.

The 9GW should go some way to compensate for the shock suspension of 21 GW of applications filed through the government’s ‘open-door’ scheme a few weeks ago. The strong interest in the now-suspended open-door scheme demonstrated that Danish offshore wind is attractive to a wide variety of offshore investors and developers. However, where a successful application through the open-door scheme would have provided access to the Danish seabed for free – with the project developer determining the location and capacity of the offshore wind farm – the tenders won’t.

The latest Danish tender, the 1GW Thor, had five applicants willing to pay the maximum possible price of €376 million. The issue was settled via a draw and German firm RWE won over three Danish entries.

The Thor auction demonstrated that Danes tend to play it fair. However, judging from the less-than-impressed local response, the new auctions are unlikely to have applicants rely on the luck of the draw.

Nykredit closes oversubscribed FoF
Fundraising may be difficult in 2023 but one smaller fish is swimming against the stream: Copenhagen-based Nykredit Asset Management has announced the final close of  the Nykredit Infrastructure Fund 3 at DKr2.6 billion ($370 million; €349 million), against a target of DKr2 billion.

This feat is even more impressive given that the fund’s predecessor – Nykredit Infrastructure Fund 1, launched in July 2018 – took three years to close at €190 million against a target of about €200 million.

The new 10-year fund of funds plans to invest in eight to 10 underlying vehicles across a wide variety of infrastructure sectors. Investors are mostly local Danish institutional investors and private banking clients. Nykredit expects yearly returns in the range of  7-9 percent after costs; with the two first funds providing yearly net returns of 9 percent.

After proving its own fundraising capabilities, Nykredit will now have to place its faith in other capital raisers.

Essentials

Nominate the Women of Influence in Private Markets 2023
Nominations are open for the third annual Women of Influence in Private Markets list, which recognises trailblazing women in alternative assets. The deadline for nominations is end of Wednesday 22 March. Each year, PEI Group’s Women of Influence list celebrates 60 women working across private markets, including infrastructure, private equity, private debt, real estate and venture capital.

Among the 10 women named in the infrastructure category in last year’s Women of Influence list were Melanie Biessy, COO and senior partner at Antin Infrastructure Partners; Carolyn Pearce, managing director at Stonepeak; and Winnie Wutte, founding partner of Asterion Industrial Partners.

PEI Group’s editorial teams will decide the list based on the following criteria:

• The nominee’s achievements over the last 12 months (since 1 March 2022) in their careers, their firm or the private funds industry;
• Evidence of innovation or game-changing actions (eg, closing an innovative deal, securing an LP commitment or launching DE&I initiatives);
• Evidence of leadership, impact or influence on others within the industry and beyond.

Submit your nomination here.

Grapevine

“From the moment I found out about this matter, I’ve done everything I could to find out what happened and to find a solution”

Spain’s transport minister, Raquel Sánchez, attempts to square the ultimate circle: what to do with an order of trains that are too big for the tunnels they intended to serve? Transport secretary Isabel Pardo de Vera already had to resign last week as a result

Who’s hiring

QIC’s Jones retires, replaced by former AMP colleague
Just two years after being appointed by Australian fund manager QIC to spearhead its efforts in private credit, initially focusing on infrastructure, Andrew Jones has retired after more than 35 years in the industry.

Writing on LinkedIn, Jones said he would “support the business through an advisory/investment committee position and look forward to contributing through these roles”.

“Andrew has reached a stage in his life where he is keen to reset his working arrangements,” QIC CEO Kylie Rampa said in a statement.

Jones joined QIC after more than 20 years with AMP Capital, where he was the group’s global head of infrastructure debt until his departure, raising four mezzanine debt funds until the business was bought by Ares Management last year. He will be replaced by Simon La Greca, who worked alongside Jones as a founding member of AMP Capital’s infrastructure debt business, and was most recently head of infrastructure debt in Asia. He has been working at the firm for over 18 years.

Small world after all.

Deals

Pathfinder financing solution flows for Ridgewood water PPP
Ridgewood Infrastructure, the US-based manager currently raising the second vintage of its Ridgewood Water & Strategic Infrastructure Fund series, has closed on a landmark PPP in Florida.

Investing alongside Israeli water desalination group IDE Technologies, the duo closed on a 30-year design, build and operate contract for a new 50 million gallon per day water treatment plant: the Prospect Lake Clean Water Center, worth $666 million.

Financing for the project has been described as a first-of-its-kind approach to financing US PPPs. The equity investors will fund 25 percent of the project costs, also taking on the risk transfer for delivery and maintenance. Its public partners, for their part, will raise low-cost financing separately to fund 75 percent of the project, according to law firm White & Case.

The Prospect Lake Clean Water Center is designed to withstand a category 5 hurricane. Let’s hope the public authority won’t be blown over by its funding commitments, though.

Today’s letter was prepared by Zak Bentley. Kalliope Gourntis, Isabel O’Brien Bruno Alves and Anne-Louise Stranne Petersen also contributed