UBS Asset Management has announced the final close for its first infrastructure debt fund, Archmore Infrastructure Debt Platform, raising €570 million ($640 million). The capital has been raised from 17 institutional investors comprising insurance companies, pension funds and family offices spread across eight European countries and Japan.
Archmore IDP focuses on private infrastructure debt opportunities in Western Europe, primarily through direct lending. The fund aims to take advantage of the capital supply/demand imbalance in the mid-size European infrastructure investment market where borrowers are looking for alternatives to traditional bank financing. The fund is part of UBS’s Infrastructure and Private Equity business, which manages $16 billion in investments on behalf of its clients.
There is a strong interest for investors seeking alternative investments, such as infrastructure debt, which offer low risk but higher yielding options relative to traditional fixed income investments, reports UBS Asset Management.
“Among investors, we see a strong and growing interest in alternatives. Infrastructure debt is an attractive alternative asset class that offers stable, long-term cash flows,” says Ulrich Koerner, president of UBS Asset Management, in a statement. “The substantial final close of our inaugural infrastructure debt fund is another important step in the expansion of our alternatives offering, enabling us to provide the solutions clients need in this challenging environment.”
Since the fund’s first closing in September 2014, UBS has deployed €220 million ($246 million), or around 40 percent of the capital raised, into four investments, including HH Ferries, a transportation operation in Scandinavia; Exeltium, an energy business in France; Senior Assist, a social infrastructure business in Belgium; and Spex, a solar energy park in in Spain.