UBS Asset Management launches second infrastructure debt fund

UBS Asset Management's Real Estate & Private Markets arm has launched its second infrastructure debt fund, Archmore Infrastructure Debt Platform II (IDP II), with seed commitments from initial investors of more than €448.4m.

Much like its processor fund, the Archmore Infrastructure Debt Platform I, the new fund will focus on private infrastructure debt opportunities in Western Europe, including Germany, primarily through direct lending, thereby capitalising on the continued capital supply/demand imbalance in mid-size European infrastructure investment markets.

The capital seeding for IDP II comes from nine institutional investors, including insurance companies and pension funds spread across five European countries and Japan. Over 75% of these institutions also invested in IDP I.

‘The fund is targeting circa €700m of equity,’ Tommaso Albanese, head of infrastructure at REPM, told REFIRE. ‘It will invest in senior secured credit across the following infrastructure sectors in investment grade countries in Western Europe: social infrastructure, transport, utilities, telecoms and energy.’

IDP I closed successfully in September 2016. Its capital has been deployed into 11 investments to date, creating a balanced portfolio across sub-sectors and countries. Most recently, it refinanced a brownfield toll road in Poland, where IDP I has committed €75m. Fund I is 94% deployed just 18 months on from the final close and it is expected that Fund II will also be efficiently deployed, Albanese said. He declined to comment on the latest fund’s annual target return.

‘Our ability to effectively deploy the proceeds of our debut infrastructure debt fund so swiftly and the fact that we have attracted such substantial seed commitments, largely from repeat investors, is testament to the ability of our team to access the excellent investment opportunities in the European market,’ Albanese added.

IDP II will be managed by a team led by Albanese, the fund’s CIO, based in London, and forms part of REPM’s global infrastructure team working across six offices globally with €3.37b of capital commitments for investment into infrastructure, through debt and equity strategies.

‘REPM’s infrastructure team has built a strong track record in the private infrastructure debt market, which it will leverage to further expand its platform and attract more client interest for this alternative asset class,’ said Thomas Wels, head of real estate and private markets at UBS Asset Management. ‘With a strong pipeline of new opportunities under review and a growing investor appetite for longer-term stable income-driven returns, I am confident that IDP II will enjoy similar success to its predecessor.’