Infrastructure-focused private equity firm I Squared Capital has closed its second infrastructure credit fund, ISQ Global Infrastructure Credit Fund II, at $3bn, doubling its initial fundraising target, according to Private Equity Wire.
The fund attracted commitments from insurance companies, sovereign wealth funds and pension funds across the US and international markets, according to Private Equity Wire.
Investor base and fund scale
ISQ Global Infrastructure Credit Fund II is four times larger than its predecessor, according to Private Equity Wire.
I Squared Capital manages approximately $60bn in assets, according to the same report.
The $3bn close was described as coming as institutional investors increase allocations to infrastructure debt, with the report attributing that framing to Bloomberg.
Strategy and return target
The vehicle is targeting returns of between 9% and 11%, according to Private Equity Wire.
The fund will reportedly provide predominantly senior secured loans to businesses owning and operating essential infrastructure, including power grids, data centres, fibre networks, ports and terminals.
Individual investments are expected to range from $150m to $400m, with lending secured against physical assets and supported by contracted or regulated cash flows, according to the report.
Geography and demand drivers cited
I Squared Capital is reportedly targeting opportunities across North America and Europe as demand for infrastructure financing accelerates, according to Private Equity Wire.
The report cites investment in artificial intelligence, expanding energy requirements, reshoring of manufacturing and ageing infrastructure as factors contributing to increased capital needs.
Market comparison noted in the report
Private Equity Wire reports that the fundraise follows Carlyle’s $2.3bn closing of its second infrastructure credit fund in September.
The report characterises that Carlyle close as highlighting growing institutional appetite for asset-backed lending strategies offering exposure to long-term infrastructure investment.
Widely-known context: infrastructure credit strategies typically lend against contracted or regulated cash flows associated with physical assets such as energy, digital and transport infrastructure.
Widely-known context: institutional investors including insurers and pension funds commonly allocate to private credit strategies that are structured around senior secured lending.
