UNITED STATES - Morgan Stanley has raised two-thirds more than originally intended for its global commingled fund, known as Morgan Stanley Infrastructure Partners, as investor demand created fund flows worth a total $4bn (€2.56bn).
The hard cap set by Morgan Stanley's infrastructure division prior to capital raising was started was $2.5bn but the firm has found many investors are seeking to diversify capital away from fixed income assets and traditional equity markets into alternative assets like infrastructure, to provide long-term stable cash flows and a longer duration-type investment.
One of its more significant investments in the fund was a $300m contribution by Teacher Retirement System of Texas, who signed up in part because the commingled fund is projected to deliver leveraged IRR in the mid teens range, on 60-70% leverage.
Morgan Stanley has already invested approximately $1bn of equity for the fund, but intends to invest in assets which provide public goods or essential services in sectors such as transportation, energy and utilities, social infrastructure and communications.
One such investment was for purchase of the Chicago Loop Parking: a 99-year concession on the largest underground parking system in the United States which delivered results for the fiscal year 2007 at 33% higher than in the same period 2006.
The fund also completed an 80% stake in the Montreal Gateway Terminals, which is the third largest container port on the North American Atlantic Coast.
A third transaction has also been made for a 16.4% interest in Agora Investimenti S.r.l, which controls SAVE, and in turn owns the Venice and Treviso Airports in Italy.