Infrastructure-focused private equity firm I Squared Capital has closed its second infrastructure credit fund at $3bn, doubling its initial fundraising target as institutional investors increase allocations to infrastructure debt, according to a report by Bloomberg.
ISQ Global Infrastructure Credit Fund II attracted commitments from insurance companies, sovereign wealth funds and pension funds across the US and international markets. The vehicle is four times larger than its predecessor and is targeting returns of between 9% and 11%.
The fund will reportedly provide predominantly senior secured loans to businesses owning and operating essential infrastructure, including power grids, data centres, fibre networks, ports and terminals. Individual investments are expected to range from $150m to $400m, with lending secured against physical assets and supported by contracted or regulated cash flows.
I Squared, which manages approximately $60bn in assets, is reportedly targeting opportunities across North America and Europe as demand for infrastructure financing accelerates. Investment in artificial intelligence, expanding energy requirements, reshoring of manufacturing and ageing infrastructure are contributing to increased capital needs.
The fundraise follows Carlyle’s $2.3bn closing of its second infrastructure credit fund in September, highlighting growing institutional appetite for asset-backed lending strategies offering exposure to long-term infrastructure investment.
