One of the world’s oldest infrastructure investors is looking to the UK market to launch a closed-ended infrastructure debt fund, which will diversify its client base.
Australian firm AMP Capital, which was founded in 1849 and has more than $135 billion (£80 billion) in assets under management, is hoping to raise £150 million for the Infrastructure Debt Fund Limited, scheduled for launch in the first half of this year.
The fund, which is in early stage development, will be listed on the London specialist funds market. It will invest into the existing AMP Capital Infrastructure Debt Fund II, which raised $303 million at launch last August and is looking to grow this to $1 billion.
The underlying fund invests in the subordinated debt of defensive, non-cyclical infrastructure businesses in Western Europe, the US and Australia.
It aims to deliver a Libor-linked cash yield of Libor +5-6%, paid quarterly and a net internal rate of return (IRR) of +7% per annum. Its predecessor fund, Infrastructure Debt, has averaged a gross annualised IRR of 8.9% and an 8.2% yield.
Estimated charges are 0.6% of net asset value once fully invested, with a 15% performance fee on returns over Libor +350 basis points.
AMP Capital’s Andrew Jones said: ‘Investor appetite has been very strong.’