I Squared Capital’s $12bn fundraise for its third global infrastructure fund is expected to close next quarter, according to an investor.

The Arkansas Teacher Retirement System said in a meeting document that it has approved a $50m commitment to ISQ Global Infrastructure Fund III, a fund planning to have a final close in the second quarter of this year.

The predecessor fund raised $7bn in September 2018.

The fund’s manager I Squared Capital is expected to be making a co-investment of not less than 2% of the total commitments.

The fund will target gross internal rate of returns of 15% to 20% and it will seek to generate an annual cash yield of 6% by the end of the fund’s commitment period.

Arkansas Teacher said in the meeting document that it has also approved a $50m commitment into the opportunistic Kayne Anderson Real Estate Partners VI fund and $40m into the PGIM Real Estate Capital VII Europe debt fund.

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