UBS edges towards €1bn debt fund hard-cap after raising further €400m

The firm’s second debt vehicle has exceeded its €700m target following commitments from European and Asian LPs.

UBS has raised an additional €400 million for its second infrastructure debt fund, bringing total commitments to €877.9 million.

The fundraising comes after the Archmore Infrastructure Debt Platform II hit a first close of €448.4 million in March. The fund is now looking to reach its €1 billion hard-cap by the end of the year. UBS had originally expected a final close within 18 months of the first closing.

Commitments have come from more than 40 investors to date, comprising a mix of insurance companies and pension funds in Europe and Asia. Some 46 percent of the investors were present in the vehicle’s €570 million predecessor, which closed in September 2016.

Archmore Infrastructure Debt Platform I is now fully invested and the second fund made its first investment in July, financing a social infrastructure portfolio in Finland, although UBS declined to expand on the transaction. The fund targets projects requiring €30 million up to €1 billion, UBS told Infrastructure Investor, with the vehicle able to participate as sole lender or as part of a club deal.

IDP II targets gross returns of 4 percent, with IDP I currently generating a 3.8 percent gross return across its 14 transactions in 13 countries, largely in northern and western Europe, with energy investments taking the lion’s share.

UBS is also believed to be planning the launch of a third international equity platform. The 2015-vintage Archmore International Infrastructure Fund II is currently generating a 9.5 percent net IRR, according to data released by CalPERS in August.