GIP nears final close on largest infra fund ever – Exclusive

Global Infrastructure Partners will likely close its third fund on between $15bn and $16bn, in what will become infrastructure's largest ever fundraise.

Global Infrastructure Partners is approaching a final close for what is certain to become the largest unlisted infrastructure fund ever raised, Private Equity International's sister publication Infrastructure Investor has learned.

GIP III will close on between $15 billion and $16 billion midway through the fourth quarter, the first week of November at the earliest. Sources familiar with the process have indicated the third fund's $15 billion hard-cap will likely be raised. The vehicle had originally been targeting $12 billion.

The upcoming final close means GIP will take back the title of largest infrastructure fundraise from Brookfield Asset Management, which closed Brookfield Infrastructure Fund III three months ago on $14 billion. Previously, GIP's second $8.25 billion infrastructure fund had been the largest ever raised.

GIP III has attracted old and new investors. Oregon Public Employees Retirement Fund, for example, approved a $400 million commitment to Fund III, double what it committed to GIP's second fund. Washington State Investment Board committed $1 billion, up from $250 million for Fund II. The Florida State Board of Administration has also renewed its commitment to GIP, approving $150 million to GIP III in March

Like its previous fund, GIP III will invest in the energy, transportation and water sectors in developed markets. It is targeting returns in the low-to-mid teens, and will have a five-year investment period and a 10-year duration, with four possible one-year extensions

The third fund launched last October and Infrastructure Investor reported in May GIP had raised $10.8 billion, according to a filing with the Securities and Exchange Commission

Since then, the fund manager has been deploying capital. Last month, GIP and its investors agreed to buy about 20 percent of Spanish electricity company Gas Natural in a close to €4 billion transaction. Spanish lender Criteria Caixa agreed to sell its stake, making GIP the second-largest shareholder in the business. The price offered by the manager, at €19 a share, values the stake at €3.8 billion.