UBS Asset Management reaches EUR1bn hard-cap for second European infrastructure debt fund
UBS Asset Management's (UBS-AM) Real Estate & Private Markets (REPM) business has held the final close of its second European infrastructure debt fund, Archmore Infrastructure Debt Platform II (IDP II), which has raised a total of EUR1 billion within nine months of its launch, substantially exceeding its original EUR700 million target following oversubscribed investor interest.
The capital has been raised from 48 limited partners, comprising a mix of pension funds and insurance companies from 10 different countries across Europe and Asia. The fund-raising benefitted from over 70 per cent re-up rate from investors in IDP II’s predecessor, Archmore Infrastructure Debt Platform I (IDP I), which completed its final investments in 2018.
The strong level of interest is a credit to the IDP platform’s proven strategy, supported by the successful track record of its first fund. IDP I is currently fully deployed across a diversified portfolio of infrastructure financings from which it has delivered investors with superior gross returns averaging 3.8 per cent.
Similarly, IDP II will look to take advantage of the continued capital supply/demand imbalance in the mid-size European infrastructure financing and focus on private senior secured infrastructure debt opportunities, primarily through direct lending where it sees the most attractive risk-adjusted yield potential. Since its launch in March 2018, IDP II already committed over 20 per cent of capital raised to four senior infrastructure financing transactions.
REPM’s European infrastructure debt platform now totals EUR1.6 billion in committed capital across the two iterations of the Archmore European IDP funds, and has invested in 16 transactions with operations spread across 11 countries over the past four years. REPM’s wider infrastructure business, comprising both debt and equity strategies for direct investments, has more than USD4.5 billion (EUR3.9 billion) in funds under management under Tommaso Albanese’s leadership. The defensive characteristics of the asset class continue to draw an institutional investor audience.
Tommaso Albanese, Head of Infrastructure at REPM, says: “The successful closing of our second European infrastructure debt fund has received strong support from both new and existing investors, who have looked to the track record of IDP I and reaffirmed their confidence in our strategy, underpinned by efficient deployment and investment diversification. The wider platform’s performance is testament to the ability of our team to generate attractive investment opportunities that provide a balanced risk profile and superior returns. While we will remain selective in our approach, IDP II’s exciting pipeline provides me with confidence in its ability to deliver solid results.”