European and international investors have backed Ancala Partners’ latest core infrastructure fund to raise €133m at first close.

The infrastructure investment manager said Ancala Infrastructure Fund II received capital from a combination of investors and expects to have further closes this year with a final target of €600m.

Fund II, a 12-year term fund, will invest in a portfolio of small to mid-sized core infrastructure businesses across Europe. The fund targets an internal rate of return of 10% to 13% per annum, including a cash yield of 5% to 6%.

Spence Clunie, a managing partner at Ancala Partners, said: “Small to mid-sized companies in the European market are particularly compelling investments at this time, providing the opportunity for us to add value through operational improvements and by growing such companies organically and from bolt-on acquisitions.

“The focus of most infrastructure investors on increasingly larger businesses enables Ancala to continue finding a substantial number of opportunities in our part of the market for bespoke investments with upside potential at attractive pricing.”