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I Squared Capital seeks to raise up to $4billion for second fund

LiveMint logoLiveMint 29-03-2017 Swaraj Singh Dhanjal

Mumbai: Global infrastructure investor I Squared Capital has hit the market again to raise its second infrastructure fund, which could see the firm raise as much as $4 billion to invest in infrastructure assets globally and in India, said two people aware of the development.

In April 2015, I Squared Capital had announced the final close of its first infrastructure fund— named ISQ Global Infrastructure Fund—at $3 billion.

Founded in 2012 by former Morgan Stanley executives, I Squared Capital is an independent global infrastructure investment manager that is focused on energy, utilities and transport in North America, Europe and some high-growth economies. It was started by Sadek Wahba (former global head of Morgan Stanley Infrastructure), Gautam Bhandari (earlier head of Morgan Stanley Infrastructure in India, Middle East and sub-Saharan Africa) and Adil Rahmathulla (the head of investment execution in the Americas for the group).

“They (I Squared Capital) are back in the market to raise their second fund, for which they are targeting a corpus of $4 billion. They are already in talks with their existing set of investors as well as new investors for the fundraise. The firm is targeting pension funds, sovereign wealth funds, family offices and other institutional investors across geographies such as North America, Europe, Asia and Middle East,” said one of the two persons cited above, requesting anonymity as the talks are private.

The fund counts institutional investors like Mitsubishi Corp. and US pension plans such as Rhode Island ERS, Hawaii ERS, and New Mexico ERB among its investors, The Economic Times reported in 2015 at the time of the fund’s final close.

I Squared Capital’s strategy for the second fund will remain the same as its first—investments in control transactions in operating infrastructure assets, both in developed markets as well as developing ones such as China, India and South America, said the second person cited above, also requesting anonymity.

“We do not respond to market speculation and have no comment,” said Harsh Agrawal, managing director and India head at I Squared Capital. Several emails and text messages sent to Bhandari, partner at the firm, did not elicit any response.

The firm has invested in hydropower, gas-fired power generation, as well as district energy systems in the US, wastewater treatment plants in China and energy assets in South America.

In India, I Squared Capital had plans to invest up to $1 billion, from its first fund, in infrastructure assets such as roads, logistics and rooftop solar power projects, Mint reported in June 2016.

I Squared has invested more than Rs1,000 crore through its investment platform Cube Highways and Infrastructure Pte Ltd in four road assets. It has committed to invest in assets worth Rs2,000 crore from its rooftop solar platform, Mint reported.

Cube Highways has made four investments in India till date—a 74% stake in Madhucon Agra Jaipur Expressways Ltd, a 100% stake in Western UP Tollway Ltd, a 74% stake in Jaipur Mahua Tollways Pvt. Ltd for Rs525 crore, and a Rs140 crore investment to acquire Andhra Pradesh Expressway Ltd from IL&FS Transportation Networks Ltd.

I Squared Capital undertakes its rooftop solar investments through its platform Amplus Energy Solutions Pvt. Ltd.

The platform sets up rooftop solar power solutions for industrial and commercial clients.

Other large infrastructure investors active in India include IDFC Alternatives’ India Infrastructure Fund II and Macquarie Infrastructure and Real Assets (MIRA), a part of the asset management arm of the Macquarie Group.

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