Union Investment has raised €294m from institutional investors for a new infrastructure fund launched in partnership with Mercer Alternatives to finance the transition to a digital and green economy.
Union Investment and Mercer Alternatives are both investing in the UniInstitutional Private Infrastructure (ITT1) fund, which plans to build a portfolio of more than 80 companies active in digital infrastructure, circular economy, sustainable transport, energy efficiency and renewable energy sectors.
Union Investment said the fund will invest in the primary and secondary market, and through co-investments, looking mainly at opportunities in Europe and North America, but with the option to add assets in Asia and other regions.
The Article 8 fund, under the EU Sustainable Finance Disclosure Regulation, has a lifespan of 14 years, with the option to extend it twice, one year for each extension.
Mirko Häring, the head of alternative investment products at Union Investment, said: “Transformative infrastructure is a growth market, as massive investments must be made in sustainable infrastructure worldwide.
”The great response [from institutional investors] to our new fund shows that investors do not want to give up infrastructure investments, even in the current market environment.”
Bastian Konle, a senior product manager in charge of alternative investments at Union Investment, said: “The investments are relatively independent from the respective market cycle, as they are made over several years.
“Moreover, they offer some protection against inflation, because revenues can be adjusted to reflect general inflation developments.”
Union Investment has already partnered with Mercer Alternatives to start Infrastructure-Invest 1 and 2 funds, the predecessors of the ITT1.
“The new fund strategically complements the two previous funds and we look forward to building on their success,” said Julia Schiffer, partner and co-fund manager at Mercer.
“The pipeline is already well filled and we plan to make the first investments shortly,” said Benjamin Baumann, partner and co-fund manager at Mercer.
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