Partners Group is planning to raise about €1 billion for its new global infrastructure fund, with secondaries funds receiving a share.
According to sister publication Infrastructure Investor, the new vehicle will continue the integrated strategy of its predecessors and is understood to be looking to invest 40 percent of its proceeds in direct infrastructure deals, with 60 percent to be deployed in both primary and secondary infrastructure funds.
The Swiss firm is expected to launch Partners Group Global Infrastructure 2018, the fourth instalment of the company’s Global Infrastructure programme, before the summer, according to sources with knowledge of the fund.
It will act as a successor to the Global Infrastructure 2015 fund, which also raised €1 billion and is targeting returns of 7-10 percent, according to the Vodafone Pension Plan, one of its investors. LPs in the previous fund also include UK local authority investors such as Fife, Warwickshire and Essex.
Partners Group declined to comment.
Previous instalments of the Global Infrastructure strategy include Partners Group Global Infrastructure 2012, which closed on €1 billion in January 2014. At the time, the firm said the approach employed by the fund enabled it to “take advantage of valuation differences” in the market. The fund was double the size of the first Global Infrastructure 2009 attempt, which closed on €500 million in March 2011.
Partners wrote in its H2 2017 Private Markets Navigator report that in infrastructure, it sees better relative value in traditional secondaries involving inflection assets – those in which the value creation process has just begun. It also wrote that it expects a correction in public markets will lead debut private markets investors to part with private equity stakes amid the high pricing environment.
“We believe many of the new market entrants into private markets will waver in their commitment to the asset class in the event of a near-term market pullback,” the firm wrote. “Any pressure on asset valuations should bring increased seller volume to the secondary market and open the door for experienced secondary investors to take advantage of market dynamics turning back in favor of buyers.”