GIP targets $1.5bn for its latest infrastructure debt vehicle

Global Infrastructure Partners is targeting $1.5 billion for its latest infrastructure debt fund.

The New York-based firm launched its GIP Spectrum Fund in February, according to documents filed with the Securities and Exchange Commission. The fund has no hard-cap and looks to make 10 to 20 investments over a four-year investment period, according to New Mexico State Investment Council meeting documents.

The fund will focus on lending senior debt across public, private and syndicated credit, the SIC materials showed. The investments will focus on construction financing, acquisition financing, liquidity and growth capital, refinancing, recapitalisation and restructuring.

More specifically, the vehicle looks to target investments where GIP would be the sole, lead or anchor investor, deals that present high barriers of entry, complex transactions with limited competition, high-quality assets used as collateral and deals that present situation-specific challenges.

The fund will focus on investments in companies located in the 36-member Organisation for Economic Cooperation and Development (OECD) countries. It will mainly target companies located in the US and, to a lesser extent, on deals in European and Latin American countries.

The vehicle will have an eight-year harvest period and is looking to target 9 percent gross returns with a 5 to 7 percent cash yield. The fund has a 1.25 percent management fee, a 5 percent hurdle rate, 10 percent carry and an 80 percent catch-up.

The fund has received a $100 million commitment from the Maine Public Employees’ Retirement System and the New Mexico SIC is mulling an allocation of the same amount. In addition, the SIC is also considering a $100 million commitment to a co-investment programme through the fund. With the potential co-investment programme, New Mexico SIC wouldn’t pay any fees or carry for its investments through the programme, and GIP would have full discretion on those deals.

GIP did not respond to a request for comment by press time.

Private Debt Investor’s sister publication, Infrastructure Investor, released its inaugural ranking of infrastructure debt fundraisers in February, which tracked debt fundraising from 2013 to 2018. UBS Securities currently sits in the 10th and final place on the ranking with $1.65 billion raised. If GIP Spectrum’s fundraise goes successfully, it could put the firm right in the mix of the top debt fundraising firms.

GIP was founded in 2006 and is a global infrastructure firm that makes both debt and equity investments. It has more than $61 billion in assets under management.