Commerz Real has launched a new infrastructure fund through its Luxembourg-based company CR Fund Management S.à r.l. With a term of around 15 years, CR Institutional Infrastructure Multi-Asset Fund II intends to invest in at least six to eight infrastructure projects.
The firm is seeking to raise €500 million ($583 million) through institutional investors. These are to receive an internal rate of return (IRR) of six to eight percent per annum. The fund is structured as an SICAV-RAIF (SICAV = société d’investissement à capital variable / investment company with variable capital; RAIF = reserved alternative investment fund) in the legal form of an SCA (société en commandite par actions / partnership limited by shares).
“With this internationally established structure, we are consciously also addressing foreign investors,” explains Johannes Anschott, the member of the board of Commerz Real responsible for institutional business.
With approximately 60 percent of the total investment costs, the focus of the CR Institutional Infrastructure Multi-Asset Fund II is on the two sectors: energy generation and energy networks, as well as other energy infrastructure. As much as 20 percent may be invested in the transport/mobility sector and 20 percent in other infrastructure projects. The geographical focus is to be placed on Europe and as much as 40 percent of the investments may also be allocated outside of the European Economic Area. The objective is to issue at least 90 percent in euro or with currency hedging. The investment strategy is geared to core and core-plus, but may be supplemented with selective opportunist shareholdings. Although these may not account for more than 25 percent of the fund assets.
According to estimates by the Global Infrastructure Hub (GI Hub), an organization established by the G20, global spending on infrastructure through 2040 is expected to rise to more than $4.5 trillion. In this respect, nearly 90 percent of the estimated capital expenditure requirements are accounted for by the energy, transport and mobility sectors. Alone for the period from 2017 to 2020 GI Hub expects a global investment shortfall of roughly $1.7 billion. In the past 20 years Commerz Real has structured and managed more than 70 infrastructure projects with a transaction volume of more than €4.1 billion ($4.78 billion).
