Australian firm AMP Capital has hit its $2.5 billion hard-cap for its third infrastructure debt fund, raising some $500 million above target to close what it's calling one of the world’s largest-ever infrastructure debt vehicles.
Total commitments to the mezzanine strategy reached $4.1 billion, following the addition of two separate $800 million co-investment pools – one from LPs in the fund and another from investors seeking access on a deal-by-deal basis.
“[The co-investors] are very experienced direct investors,” Andrew Jones, AMP’s global head of infrastructure debt, told sister-publication Infrastructure Investor. “They've been attracted to our strategy and want access to our fund but also have large appetite over and above their fund commitments.”
The fund was launched in November 2015 and has received investment from 125 LPs across 12 countries. Jones said the largest pool of support came from Japanese and Korean investors, with the former committing over $300 million and the latter, through a partnership with Mitsubishi UFJ Trust and Banking, investing over $700 million in the fund.
The Northamptonshire, East Riding and Cambridgeshire county council pension funds in the UK each committed more than $100 million.
The vehicle will be looking to make 10 to 15 mezzanine debt investments across OECD countries, typically between $100 million and $200 million each. IDF III has already made four investments, one of which is believed to be its Skr1.47 billion ($169 million; €151 million) mezzanine debt injection in a Swedish district heating portfolio in May. Jones declined to comment on the identity of the deals sealed so far, although he said two are based in Europe and two in the US across the regulated utilities, transportation and energy generation spaces.
Europe and North America are expected to form the bulk of the fund’s dealflow, with further transactions in the renewables, telecommunications and energy distribution sectors being targeted. The fund has a gross IRR target of 10 percent.
IDF III, AMP Capital’s third infrastructure debt fund in five years, was launched less than a year after the $1.1 billion close of its predecessor. Asked about the prospect of further funds, Jones responded that capital is present to back such possible ventures.
“We would expect, assuming we do a good job with this fund, there will continue to be investors supporting [us]. We think there will always be a demand there for attractive cash yield and capital stability so it's already been a long-term strategy for us and we expect that to continue,” he said.