UBS Asset Management’s Infrastructure and Private Equity has raised €570m ($640m) for its first infrastructure debt fund.
The Archmore Infrastructure Debt Platform was backed by 17 institutional investors, including insurance companies, pension funds and family offices from Europe and Japan.
The manager said the strong interest reflected the low yield and interest-rate environment, with investors seeking alternative investments such as infrastructure debt.
Archmore IDP focuses on private infrastructure debt opportunities in Western Europe, mainly through direct lending.
Ulrich Koerner, president of UBS Asset Management, said: “Among investors, we see a strong and growing interest in alternatives. Infrastructure debt is an attractive alternative asset class that offers stable, long-term cash flows.
“The substantial final close of our inaugural infrastructure debt fund is another important step in the expansion of our alternatives offering, enabling us to provide the solutions clients need in this challenging environment.”
The fund, led by Tommaso Albanese in London, aims to take advantage of the capital supply/demand imbalance in Europe’s mid-sized infrastructure investment market, where borrowers are looking for alternatives to traditional bank financing.
Since the fund’s first close in 2014, UBS has deployed €220m, or 40% of the capital raised, in four investments, including HH Ferries, a transportation operation in Scandinavia and Exeltium, an energy business in France.