Private Equity News & Analysis

UBS closes $1.5bn debut infrastructure fund

Citing 'exceptional client demand' for its initial foray into infrastructure, the institutional asset manager may seek to raise a second fund in 2009. The UBS International Infrastructure Fund has already made three investments since last year.

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UBS Global Asset Management, the asset management arm of
Switzerland-based investment bank UBS, has closed its debut
infrastructure fund on $1.5 billion.

The UBS International Infrastructure Fund will have a minimum
investment period of 15 years and target direct investment
opportunities in Organisation for Economic Cooperation and Development (OECD) –member states, such as the UK.

The fund close is the latest in a wave of fundraising success in the
infrastructure sector, which has continued to see demand from
investors despite turbulent economic conditions. In the first nine
months of the year, $21.5 billion was raised for infrastructure funds,
a pace that falls short of 2007's record fundraising pace but already
in excess of the 2006 total, according to data gathered by placement
agent Probitas.

“Due to the exceptional client demand for the UBS International
Infrastructure Fund, I envisage that a similar strategy will be
launched in 2009,” said John Fraser, chairman and chief executive
officer of UBS Global Asset Management, in a statement.

The investor base for the fund is comprised of institutional investors
from across North America, Europe, the Middle East and Asia Pacific.

To date, the fund has already acquired stakes in three infrastructure
investments. In the US, it acquired a 50 percent stake in Northern
Star Generation, a power utility, in 2007. In the UK, it bought an 18
percent stake in Southern Water, a UK water utility, in 2007. In
Austria, it owns a 28 percent stake in waste management company
Saubermacher, which it acquired in June.

UBS' Infrastructure Asset Management team 25-member investment team will manage the fund. The investment team is headquartered in London with staff in New York, Hong Kong, Tokyo and Sydney.

The Infrastructure Asset Management is located within UBS Global Asset Management, which had invested assets totaling $741 billion as of 30 June, making it one of the largest institutional asset managers in the world.