Strong dealflow prompts £160m Sequoia fundraise

The listed debt fund could seek to garner a further £210m through a placing programme.

Sequoia Economic Infrastructure Income Fund is looking to raise up to £160 million ($207 million; €190 million) through a placing, open offer and offer for subscription, PDI sister publication Infrastructure Investor has reported.

The London-listed vehicle has a £120 million target for this latest effort, which comes after it collected more than £450 million via two C-share issues and a placing programme since its March 2015 IPO. The fund, which is advised by Sequoia Investment Management Company, is also considering a potential placing programme to raise a further £210 million.

Sequoia is looking for fresh dry powder to “take advantage of opportunities which its investment adviser continues to see in the infrastructure debt market,” it said. These, in turn, “will enable it to further diversify its existing portfolio and spread the fixed costs of running the company across a wider base, as well as increasing secondary market liquidity for investors,” it added.

The fund, a Guernsey-incorporated closed-ended investment company, focuses mainly on taking subordinated and select senior debt exposures to economic infrastructure projects and companies. It targets the UK, Western Europe, North America, Australia and New Zealand through acquiring both loans and securities.

Sequoia aims to generate dividend yield of 6 percent from year two onwards (5 percent in year one) and a further 1-2 percent in capital appreciation. As of 31 March, its portfolio comprised 30 private debt investments and 15 infrastructure bonds, collectively valued at £600.3m.