M&G's Infracapital raises £1.25bn for first greenfield infrastructure fund

Infracapital has exceeded the capital raising target for its first greenfield infrastructure fund after receiving £1.25bn (€1.39bn) at close.

Infracapital, the infrastructure equity investment arm of M&G Investments, said the total commitments were well above its £1bn target and in line with Infracapital’s internal hard cap.

The fund’s strategy is to invest in the later stages of development, construction and expansion stages of projects and companies across a variety of sectors, including communications, energy, renewables, social infrastructure, transport and utilities.

Infracapital said there was significant demand from institutional investors, with 85% of the fund committed by pension funds and insurance companies. The fund also attracted new investors from new geographies, with 50% of the capital coming from international investors.

Andy Matthews, head of greenfield at Infracapital, said: “We have made great progress and have already created a diversified portfolio of five investments by deploying seed capital.

“We continue to see significant opportunities for new investment in both the UK and Continental Europe, and expect the fund to be over 50% committed by the end of the year.”

Infracapital has already committed 43% of the fund to five assets.

Martin Lennon, head of Infracapital, said: “It is natural to see pension funds and institutional investors increasing their allocations to infrastructure as it has long been seen as an asset class that can provide long-term, predictable and often inflation-linked income.

“This latest capital raising demonstrates that there is appetite from many investors to access projects at an earlier stage, providing the usual characteristics investors are attracted to but with a different return profile.”