The Oregon Public Employees Retirement Fund has approved a $400m (€366m) commitment to a global infrastructure fund.
The US pension fund is investing in the Global Infrastructure Partners Fund III, according to a board meeting document from the Oregon Investment Council (OIC).
Investment staff at OIC expect the investment in Fund III to be an anchor commitment to Oregon PERF’s infrastructure portfolio.
To date, the pension fund has approved more than $1.5bn in aggregate commitments to infrastructure assets.
The pension fund believes Global Infrastructure Partners has proven so far to be an effective manager in the infrastructure sector.
For Fund II, returns have been a 27% net IRR, higher than the 15-20% targeted gross IRRs for Fund III.
Oregon PERF believes the manager has co-invested more than its fair share of equity in its funds.
The OIC stated in a board meeting document that the manager will have committed a minimum of $230m to its equity funds, providing significant “skin in the game”.
GIP is planning on a $12.5bn capital raise for Fund III, with a $15bn hard cap.
A first closing for the fund is planned for this month.
The fund has a five-year investment period, with a 10-year total life for the fund, which is investing in Europe and the US.
GIP will focus on infrastructure assets that include energy, transportation and water/waste sectors.
To date, 80% of the manager’s equity investments for Fund II have been through industrial joint ventures.
The long-term plan for Fund III is to make 10-14 equity investments, with the view to securing a controlling interest in each transaction.