Illinois Firefighters Pension Investment Fund (FPIF), which made its first-ever infrastructure investment in August last year, has now made its first commitment to its non-core infrastructure portfolio by investing in a a global fund managed by I Squared Capital.
The pension fund disclosed in a meeting document that it has made a $27m (€24.1m) commitment to I-Squared Global Infrastructure Fund IV.
The initial non-core infrastructure commitment is the first of a potential three commitments worth $80m in total that the pension fund intends to issue to fund managers. This strategy involves an open search for fund managers through a request for expression of interest.
The ISQ Fund IV fund’s investment strategy focuses on a diverse mix of sectors, including power and utilities, transportation and logistics, digital infrastructure, environmental solutions and social infrastructure.
The fund expects to generate net internal rates of returns (IRRs) of 11% to 13%, and gross IRRs ranging from 15% to 20%, alongside an annual cash yield of 6%.
To actively drive operational improvements and exert greater control over exit strategies and timing, the fund intends to acquire controlling or co-controlling stakes in its portfolio companies.
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