IFM Investors has launched its first open-ended global infrastructure debt fund, raising $500m (€431m) from investors that include Virginia Retirement System (VRS).
The Australian company manages one of the world’s largest and longest-running infrastructure equity funds, and IFM Investors will look to replicate this for infrastructure debt.
To date, IFM Investors has managed infrastructure debt through an Australian fund, separate accounts and funds set up for specific investors, such as a vehicle established last year with Samsung SRA for South Korean investors. The new fund will be its first IFM-branded, open-ended global vehicle.
IFM Investors, which according to IPE Real Assets’ latest ranking of infrastructure managers oversees €28.1bn of infrastructure equity and €4.1bn of infrastructure debt, hopes to raise $500m each year for the fund.
Although the IFM Infrastructure Fund will have a global remit, vice president Christopher Falzon said it anticipated that the “lion’s share of the opportunity” would be in the US.
IFM Investors has been looking to increase its activity in the US infrastructure for market in recent years.
The company hopes to capitalise on an “underserved” part of the US market by targeting senior-secured, floating-rate loans.
Falzon said there was a lack of supply in this area of the sub-investment-grade credit markets with insurers and institutional investors typically targeting long-duration, fixed-rate debt and private-equity funds targeting mezzanine and preferred equity.
He said investors were investing in the fund either as an alternative to core infrastructure equity and or as a form of private credit.
VRS told IPE Real Assets it plans to invest $100m in the fund.
The $78.3bn pension fund is also investing the same amount in BlackRock’s Global Energy & Power Infrastructure Fund III.
The fund announced a first close in July, securing $1.5bn of capital. According to sources, BlackRock hopes to eventually raise $3.5bn.