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InfraRed’s third Euro fund oversubscribed at £475m

The private infrastructure and real estate investment management firm has exceeded its original capital-raising target by £75 million and already has deployed 40 percent of the capital.

InfraRed Capital Partners, the private infrastructure and real estate investment management firm, has held a final closing of £475 million (€593 million; $760 million) for its latest European value-added real estate fund, exceeding its original £400 million fundraising target.

The firm announced today the oversubscribed fund closing, which comes at a time when higher risk/return strategies in Europe are in favor among global institutional investors. Indeed, The Blackstone Group, the private real estate sector’s largest investment manager, even re-opened its European fund after breaking the regional capital-raising record, such is the current demand. 

InfraRed’s Active Fund III is far smaller than that of Blackstone but nevertheless has been well supported. The firm noted how more than 20 investors from around the globe committed equity to the closed-ended vehicle, including from Europe, the US, Canada, Malaysia, Australia, Qatar and the UAE.

The fund will be focused on investments in the retail, office and industrial markets of the UK, Germany and France. InfraRed said that more than 40 percent of its capital already had been committed to six deals. These included the Eastgate shopping center in Basildon in the UK and the Hachette Tower, an office in Paris.

Werner von Guionneau, chief executive officer of InfraRed, said the fund enjoyed a high level of re-investment from existing investors in the fund series and investors that previously backed its infrastructure funds but were investing in its real estate strategies for the first time. “This successful fundraising brings the number of funds raised by InfraRed to 15, eight in real estate and seven in infrastructure to date,” he said. 

Chris Huxtable, head of European real estate and the fund manager of Active Fund III, added: “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 fundraising. We already have committed equity to six projects – all of which are performing in line with, or ahead of, their business plans.” 

Atlantic-Pacific Capital served as placement agent for InfraRed.