Exclusive: Mizuho closes infra debt fund on $300m

The Japanese investment manager has also secured an overseas infrastructure mandate from Chikyoren, one of the biggest pensions in Japan.

Mizuho Global Alternative Investments closed its maiden project finance fund last month on 33 billion yen ($302 million; €256 million), with commitments from domestic institutional investors.

The alternative investment management arm of Japan’s Mizuho Financial Group launched the project finance fund, dubbed Cosmic Blue PF Trust Lily, in July 2016, with 10 billion yen in seed capital from Dai-ichi Life Insurance.

After a year of fundraising, Mizuho decided to close the fund last month, but is looking to raise as much as 100 billion yen as a long-term goal for the strategy, according to Jack Wang, an investment officer at MGAI.

The vehicle will target brownfield project finance debt, particularly senior-secured loans, across the globe and is expected to offer returns of about 2 percent, according to a Nikkei report. The 20-year fund will convert foreign currency-denominated cashflows from overseas assets into Japanese yen, with currency hedging arranged by commercial banks.

“About 14.5 billion yen of the committed capital has been deployed,” said Wang, adding that the portfolio is diversified across the globe, as he sees a healthy pipeline of opportunities in various jurisdictions.

The firm also secured an overseas infrastructure mandate from one of the ‘Big Four’ public pensions in Japan – the Pension Fund Association for Local Government, known as Chikyoren – two weeks ago.

This is the fourth overseas infrastructure mandate awarded by the $185 billion pension after it hired Tokio Marine Asset Management last month, and appointed JPMorgan Asset Management and Mitsubishi UFJ Trust and Banking Corporation last year.