Schroders surpasses €700 million for European sub-investment grade infrastructure debt fund ahead of €1 billion hard cap fundraising target

The fund, which is managed by Schroder Aida, the group’s specialist infrastructure team, was launched in Q3 2020 and aims to invest in European sub investment grade infrastructure debt opportunities. It has now reached €739.5 million in size with this latest close.

Today’s news follows shortly after last month’s update which confirmed that €532 million had been raised. The fund is the second vintage of this strategy whose first fund (Julie) was launched in 2017 for close to €350 million. This was almost fully deployed within two years.

In January 2021, Schroders appointed Chantale Pelletier as Schroders’ Global Head of Infrastructure to lead the growth and development of Schroders’ infrastructure investment platform.

As part of Schroders Private Assets, Schroder Aida seeks to provide investors with access to resilient and sustainable returns from essential infrastructure in Europe across the capital structure (senior debt, junior debt and equity). 

It has invested in over 75 transactions in European infrastructure companies in 11 countries over the last five years, with a focus on energy transition, mobility and digital infrastructure.  

Augustin Segard, Schroders’ Head of Enhanced Infrastructure Debt, commented:

“Today’s announcement demonstrates the commitment and belief our investors have in the team’s ability to identify excellent investment opportunities and deliver robust returns.

“The high demand we have seen for the fund is also further evidence to support our investment philosophy that there are many attractive investment opportunities in the sub-investment grade infrastructure debt space. Now, perhaps more than ever before, investing in infrastructure is key to supporting the world’s growing population and boosting economies.”

Jerome Neyroud, Schroders’ Head of Infrastructure Debt, commented:

“The news of the success and speed of this fundraise underpins how crucial it was for the team to have been one of the first movers in this market. We have now raised well over €1.2 billion for EUR and GBP sub-investment grade infrastructure debt strategies.”

Peter Arnold, Schroders’ Co-Head of Private Asset Sales, commented:

“Coming so soon after having announced that we had raised €532 million, this update demonstrates the ongoing momentum for this strategy and asset class.

“The continued strong interest in Julie II shown by our existing global partners as well as new clients that have joined this close provides further evidence of their trust in Schroders’ ability to deliver investment performance that closely matches their objectives, and we are now focused on reaching a hard cap of €1 billion.”

Julie II focuses on mid-sized brownfield core assets based in Europe, with a focus on delivering diversified debt exposure across countries and sectors. These entail assets that provide essential services; are capital intensive with high barriers to entry; have a long economic life; deliver long-term cash flows; benefit from regulated markets; and have low technological risk.

Examples of these opportunities include water and energy companies, railways, renewable energy portfolios, electricity grids and roads.

Infrastructure debt is an increasingly attractive asset class for institutional investors due to its defensive nature. In particular, sub-investment grade infrastructure debt enables healthy yields to be captured in the low interest rate environment, while maintaining a stronger credit profile than other assets with similar ratings.

Schroders Private Assets is the private market investment arm of Schroders, the global asset management group. It offers investors a local approach to investing across a broad range of private asset strategies, supported by a global perspective. Across private assets and alternatives, Schroders has £46.1 billion* in assets under management.

*As at 31 December 2020

 

[1] A Luxembourg Reserved Alternative Investment Fund.