News & Analysis

Cordiant raises more than $500m for latest infra debt strategy

The Montreal-based firm has made its first investment through the fund, backing a Greek solar farm with a long-term off-take agreement.

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Cordiant Capital, a Montreal-based fund manager, has reached first close on the Cordiant VII Infrastructure & Real Assets Debt fund, which will invest in select growth markets.

The firm said it had raised more than $500 million for the fund and a parallel managed account that will invest alongside Cordiant VII, but did not provide separate figures. Cordiant VII has a $1 billion hard-cap and is targeting unlevered net returns of between 9 and 10 percent by investing in the telecommunications, transportation and energy sub-sectors, as well as agriculture, according to Benn Mikula, a managing partner at Cordiant.

“Fundamentally, our cornerstone investment strategy is built around teams with deep investing and operating knowledge of specific sectors,” Mikula told PDI‘s sister title Infrastructure Investor. “This is one of the ways we add significant value for our investors.”

Cordiant VII Infrastructure and Real Assets Debt Fund has collected commitments from a Canadian family office and European insurers, and it will invest alongside the separately managed account of an undisclosed investor. The fund is expected to reach final close in the first half of next year.

The vehicle will seek upper mid-market investments “where we can apply growth capital to companies expanding their infrastructure portfolios”, Mikula explained. Cordiant will seek opportunities mainly in “regions, such as emerging Europe, Latin America and selected parts of Africa and Asia”, Cordiant said in a statement.

“By moving into a diversified group of countries that we understand well, we’re able to generate leveraged debt fund-type returns, but we do so with all of the governance, covenants, collateral and investment quality that you would expect of an infrastructure fund,” Mikula said.

Cordiant recently closed its first deal from Fund VII, backing an operating solar farm in Greece that is secured by a long-term off-take agreement. Mikula declined to provide further details on the investment.