InfraRed Capital Partners, the global investment manager focused on real estate and infrastructure, has reached a final closing of its latest real estate fund, InfraRed Active Fund III, (Active Fund III or the Fund) with total equity commitments of £475m (US$760m). This exceeded the £400m target and was oversubscribed at final closing, reflecting the attraction of InfraRed’s well-established platform and strong track record in value-add property investment. With the associated leverage envisaged for its strategy, Active Fund III has an investment capacity of around £1bn (US$1.6bn). This excludes potential equity co-investment opportunities, which InfraRed’s deal flow has successfully generated in the past.
Active Fund III will continue to pursue a similar value-add strategy to its predecessors, focusing on pre-defined investment themes within the shopping centre, industrial and office markets in the UK, Germany and France.
InfraRed has already committed more than 40% of the Fund’s capital to six projects within its target markets. The portfolio currently includes the Eastgate shopping centre in Basildon, Essex, the Mill Gate shopping centre in Bury, Greater Manchester, over 2m sqft of industrial/logistics space in the UK regions, the ‘Hachette Tower’, a 145,000 sqft office in the 15th district of Paris and the ‘Leitwerk’, a 410,000 sqft office building in Munich.
Over 20 investors across the globe have invested into Active Fund III, including high-quality institutions and family offices from Europe, the US, Canada, Malaysia, Australia, Qatar and the UAE.
Werner von Guionneau, CEO of InfraRed, commented:
“We are very pleased with the level of investor demand, in particular with the high level of re-investment from existing InfraRed investors – including those from our infrastructure funds committing to our European real estate platform for the first time. This successful fund raising brings to fifteen the number of funds raised by InfraRed, eight in real estate and seven in infrastructure to date.”
Chris Huxtable, Head of European Real Estate, and the fund manager of Active Fund III, noted:
“Our investors drew considerable confidence from the quality and embedded value of our investments to date, its balance between income and capital gain and the consistency of the acquired assets with the strategy we communicated to investors at the outset of the fund raising. We have already committed equity to six projects – all of which are performing in line with, or ahead of, their business plans.”
Commenting on the fundraising, Andreas Katsaros, Head of Real Estate Strategy & Origination, said:
“In addition to re-ups, we were able to attract a high-quality line-up of new investors. Limited Partners are nowadays differentiating more than in the past between value-add and opportunistic investment styles and are considering returns on a more risk-adjusted basis; our strategies ensure we can generate consistently strong returns without mainly relying on leverage and market movements or by taking material development risks. We believe this is a positive development for the industry and for genuinely value-add operators like InfraRed.”
Atlantic-Pacific Capital acted as global placement agent for InfraRed.
Weil, Gotshal & Manges acted as legal advisor to the Fund.