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Infranity Nears Fundraising Target for Maiden Infrastructure Equity Fund

Infranity, a new infrastructure investment manager, is close to reaching the minimum target for its debut closed-end infrastructure equity fund, according to people familiar with the matter.

The firm has already raised more than two-thirds of the €500 million target for the fund, with about a year remaining until its final close, the sources said. Infranity is seeking to capitalize on growing investor appetite for infrastructure assets as institutions look to diversify their portfolios amid volatile public markets.

The new fund will focus on investing in core and core-plus infrastructure projects across Europe, with a particular emphasis on the energy transition, digital infrastructure, and transportation sectors. Infranity was founded in 2021 by a team of veteran infrastructure investors, and the fund represents the firm's first institutional product offering.

"There is significant investor demand for well-managed, diversified exposure to the infrastructure asset class," said one of the sources, who asked not to be named discussing private fundraising information. "Infranity's team has a strong track record, and the fund's strategy aligns with many of the key infrastructure investment themes we're seeing in the market."

Infrastructure funds have attracted robust inflows in recent years as investors seek stable, income-generating assets to offset volatility in stocks and bonds. According to data provider Preqin, infrastructure funds raised a record $130 billion globally in 2021, up from $91 billion the prior year.

The surge in infrastructure investment has led to heightened competition for assets, putting pressure on returns. The average net internal rate of return (IRR) for infrastructure funds has declined from 11.5% for vintages before 2010 to 9.5% for 2010-2019 vintages, Preqin data shows.

Still, infrastructure remains a popular allocation, with pension funds, insurance companies, and other institutional investors continuing to increase their target exposures. Industry executives say the growing focus on sustainability and the energy transition is a key driver of infrastructure fundraising and dealflow.

Infranity's fund will target equity investments of €50 million to €150 million, the sources said. The firm declined to comment on the fundraising.