IST3 Global Infrastruktur, a fund set up last year for Swiss pension funds, has begun investing in infrastructure funds on the secondary market.
The not-for-profit IST Investment Foundation, which created the fund, has hired Stafford Capital Partners to help invest CHF120m (€115m) in infrastructure ‘secondaries’.
A first deal has been completed in Europe, Ingo Marten, Stafford Capital managing partner, told IP Real Estate. IST3 would not comment.
A second deal – also in Europe – is likely to be completed in the coming months, Marten said, with Stafford Capital investing IST3’s capital between now and mid-2016.
At a time of increased interest in infrastructure secondaries, the firm will target core funds with “little construction risk”, Marten said.
Secondary transactions involving infrastructure fund units increased by 177% in 2014 over 2013, to $1.9bn (€1.7bn), according to a 2014 Volume Report compiled by Setter Capital.
“There is a search for yield for investors and there are clear benefits from a secondaries strategy. There is limited blind-pool risk, alongside the ability to access concrete expertise in infrastructure,” he added.
“There are several benefits attached to this, which is getting more and more known to investors.”
Marten said the infrastructure secondaries market has evolved from a first phase when banks were the primary sellers.
“That has moved on now and you can now see deal flow,” he said. ”Secondaries market investors are used to it and feel comfortable with it.”
Stafford Capital recently completed investment of capital from its Infrastructure Secondaries Fund.