Integrated Asset Management (IAM) has closed its first dedicated infrastructure debt fund, an investment vehicle resulting from the need for longer-term debt required to invest in the Canadian market.
IAM Private Debt Group, the private debt division of IAM, announced 28 September that it closed its Long Term Infrastructure Debt Fund on C$347 million ($263.9 million, €235.4 million) after two years of fundraising.
The investment vehicle will offer loans with terms as long as 25 years and will begin investing immediately in projects that include toll bridges, wind farms, solar energy, biomass and cogeneration facilities, municipal waste treatment plants and others, according to the statement.
IAM Private Debt Group president Phillip Robson said the Long Term Infrastructure Debt Fund was designed to respond to demand from its pension fund and insurance company clients for long-term assets with predictable yields higher than those available in public bond markets.
Typical loans from the fund will be about C$25 million ($19 million, €16.9 million ) and could be as large as C$50 million ($38 million, €33.9 million), with an interest rate of between 6.25 percent and 6.75 percent and a term of between 15 and 20 years, Robson told PDI in an interview.
The focus of institutional investors on large Canadian infrastructure projects leaves significant opportunities in the country's mid-market, he said. The fund will seek out opportunities to enter projects in their early stages, concentrating on loans that are directly originated or where the firm can be part of a very small club of lenders.
IAM is a Canadian asset manager with approximately C$2.7 billion ($2.05 billion, €1.83 billion) in assets and committed capital under management. The firm's clients include Canadian pension funds, endowments, foundations, insurance companies and others.
Last November, the IAM Private Debt Group closed its fifth mid-term private debt fund on C $667 million ($507 million, €452 million) . The fund included nine new and five existing investors and invested in senior loans to investment grade mid-market Canadian companies.