I Squared Capital targets raising up to $6.5 bln in new fund-sources

Hutchison Telecommunications Hong Kong Holdings

08/08/2017 11:49

By Kane Wu 
    HONG KONG, Aug 8 (Reuters) - Infrastructure investor I 
Squared Capital aims to raise as much as $6.5 billion in a new 
global fund to tap rising demand for infrastructure assets and 
has already won commitments for a large chunk of the sum, people 
familiar with the matter said.  
    I Squared already had around $5 billion in committed 
investments for the fund last month, when it announced the 
acquisition of Hutchison Telecommunications Hong Kong Holdings' 
 0215.HK  fixed-line assets for $1.9 billion, said two of the 
people.    
    The firm has agreed to acquire the business in a cash deal, 
and one of the people said around half of the deal value would 
be paid from the new fund and the remaining through bank debt. 
 urn:newsml:reuters.com:*:nL4N1KU2NK 
    I Squared, which is said to be among potential bidders for 
Equis Energy, Asia's largest independent renewable energy 
producer valued at up to $5 billion, declined to comment for the 
story.  urn:newsml:reuters.com:*:nL3N1KG2LO 
    The people declined to be named as they were not allowed to 
discuss the matter in public. 
    New York-based I Squared's second fund targeting global 
investors follows a series of large-sized fundraisings by 
private equity firms in recent months, many of which are looking 
to bet on investment opportunities in Asia and tap capital in 
the region.      
    Blackstone Group LP  BX.N  is seeking to raise up to $3 
billion in its first pan-Asia buyout fund for investments in 
sectors including high-end manufacturing and healthcare, people 
familiar with the plan told Reuters last month.  urn:newsml:reuters.com:*:nL3N1KB3PG 
    KKR & Co  KKR.N  in June closed a new Asia-focused buyout 
fund after raising $9.3 billion, a record for the region. 
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    GROWING IN SIZE 
    I Squared's new fund is set to be the biggest infrastructure 
fund raised since Global Infrastructure Partners' record $15.8 
billion fund that closed in January this year, according to data 
provider Preqin. 
    The average size of global infrastructure funds has risen 
sharply over the last five years, Preqin data shows, as demand 
for infrastructure investments rises. The average fund size in 
2012 was $427 million while in 2017 so far the average fund size 
has reached $1.3 billion. 
    Nearly a fifth of the $94 trillion in global infrastructure 
investment needed by 2040 risks being unfunded if current 
spending trends continue, the G20-backed Global Infrastructure 
Hub said last month. 
    I Squared, founded by a few former bankers at Morgan Stanley 
Infrastructure Fund, invests in energy, utilities and transport 
businesses in the Americas, Europe, and select high growth 
economies.  
    It closed a $3 billion fund in April 2015, with investments 
from pension funds, sovereign wealth funds, insurance companies, 
asset managers and family offices from the United States, 
Canada, Europe, the Middle East, Asia and Australia, the firm 
said at the time. 
    The limited partners in the second fund will be a similar 
group, one of the people said. 
    The firm separately received a $200 million commitment last 
October from The Overseas Private Investment Corporation (OPIC), 
the U.S. Government's development finance institution, for a 
fund that invests in South and Southeast Asia. 
 
 (Reporting by Kane Wu; Editing by Sumeet Chatterjee and 
Muralikumar Anantharaman) 
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging: 
kane.wu.thomsonreuters.com@reuters.net)) 
 
Keywords: ISQUARED FUND/