Schroders has announced that it has raised €532 million for the Schroder Euro Enhanced Infrastructure Debt Fund II (Julie II), following a successful first close which raised €312 million.
The fund, which is managed by Schroder Aida – the group’s specialist infrastructure finance team, was launched in Q3 2020 and aims to invest in European sub investment grade infrastructure debt opportunities with a target of €750 million in total.
It 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.
To date Schroders has raised more than €1 billion for EUR and GBP sub-investment grade infrastructure debt strategies, establishing the firm as one of the key asset managers operating in this space in Europe.
Building on this momentum, Julie II has achieved a 25% deployment rate in just seven months, having executed four transactions to date.
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 which 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. The fund also integrates environmental, social and corporate governance (ESG) factors into its investment process.
Augustin Segard, Schroders Head of Enhanced Infrastructure Debt, commented:
“Investing in infrastructure is key to supporting the world’s growing population and boosting economies.
“We remain convinced that there are attractive investment opportunities in the sub-investment grade infrastructure debt space and have continued our good start with the deployment of this second vintage.”
Jerome Neyroud, Schroders Head of Infrastructure Debt, commented:
“We have now raised more than €1 billion for EUR and GBP sub-investment grade infrastructure debt strategies. We are very pleased with these recent developments that are the consequences of our team being one of the first movers in this market.”
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.
Peter Arnold, Schroders Co-Head of Private Asset Sales, commented:
“Julie II has made excellent progress since first close a few months ago as we have already raised more than 70% of our target of €750 million.
“The notable 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.”
In January 2021, Schroders appointed Chantale Pelletier as Schroders’ Global Head of Infrastructure to lead the growth and development of Schroders infrastructure investment platform. Chantale will assume the role by the end of March 2021 and report into Georg Wunderlin, Schroders Global Head of Private Assets.
As part of Schroders Private Assets, Schroder Aida provides 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 $3.0bn* in over 75 European infrastructure companies in 11 countries over the last five years, with a focus on energy transition, mobility and digital infrastructure.
Schroders Private Assets is the private markets 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