UBS closes debt fund on €1bn hard-cap – exclusive

Archmore Infrastructure Debt Platform II is almost double the size of its predecessor and is 20% invested.

UBS Asset Management has reached a final close on its second infrastructure debt fund, raising €1 billion nine months after its launch.

Archmore Infrastructure Debt Platform II raised €300 million over its target size and €430 million more than its predecessor raised in 2016. Commitments came from 48 European and Asian LPs, across a mix of pension funds and insurance companies, with a re-up rate of more than 70 percent.

Investing in senior debt transactions, IDP II has made four investments to date, marking 20 percent of the capital raised, including a social infrastructure deal in Finland. It aims to make between 10 and 16 investments in total and targets a gross return of 4 percent. IDP I is fully invested and is currently generating gross returns of 3.8 percent.

UBS “will remain selective in our approach” according to Tommaso Albanese, head of infrastructure at the group. The firm says it will continue to “take advantage of the capital supply/demand imbalance in the mid-size European infrastructure financing” space.

The fund targets investments across the transport, utilities, telecoms, energy and social infrastructure sectors. No more than 20 percent of the fund will be deployed in any one investment, no more than 30 percent in any one country. IDP II targets projects requiring €30 million up to €150 million of UBS debt, with the ability for the fund to act as sole lender or in a club.

UBS is also believed to be close to launching its third infrastructure equity fund. Its 2012-vintage second fund, which raised about €650 million, is now thought to be fully invested.