The Pennsylvania Public School Employees’ Retirement System is committing $100m (€94.2m) to the GCM Grosvenor Customized Infrastructure Strategies II vehicle.
The commitment – which has been approved, according to a pension fund board meeting document – will make up a significant portion of the capital raise for Infrastructure Strategies II.
Courtland Partners, the investment consultant for Pennsylvania Public School, said the vehicle is targeted at $650m.
The fund is focused on fund investments, secondary fund investments and co-investments across the globe, with a preference for OECD countries.
Targeted returns for the fund are in excess of 10%, according to Courtland Partners.
Pennsylvania Public School believes that committing to a mature infrastructure fund helps avoid the upfront fee drag that occurs in the early years of a fund, while providing mature cash flow.
Investors that commit at least $75m to the fund have the ability to opt-out of primary fund investments, an option Pennsylvania Public School is planning to exercise.
Primary fund investments could make up 40-60% of the portfolio, while secondary investments will make up 10-30%.
Around 10 different secondary purchases are expected to be targeted, typically being LP interests in funds that have already had final closings.
The co-investment portion of the fund will be 20-40% of the total portfolio.
The total number of co-investments could be in the range of 10 to 15 and will include a combination of debt and equity investments.
This will involve making commitments into as many as 10 infrastructure funds on a primary basis.
Both brownfield and greenfield infrastructure will be considered.
The types of infrastructure will include power generation, energy, transportation, regulated utilities, social and public/private partnerships and telecommunications.
