Schroders Capital’s Private Debt & Credit Alternatives business today announces that it has raised €2bn in total commitments from third party investors for its sub-investment grade (IG) infrastructure debt strategy. This follows the final close of the Schroders Capital Junior Infrastructure Debt Europe III fund (JULIE III) and includes co-investments alongside the fund.
The JULIE III fund, which is managed by Schroders Capital’s Infrastructure Debt team, is the fourth vintage in the firm’s sub-IG strategy series. Launched in 2017 as the first of its kind in the market dedicated to European sub-IG infrastructure debt, the manager has one of the longest track records in the space.
The strategy has been backed by a global base of LPs including insurance companies, pension schemes, asset managers, and sovereign wealth funds. The fund is already c. 50% deployed, delivering a gross return in excess of 8%.
The strategy focuses on the infrastructure mid-market across a range of sectors, such as data centres, energy companies and renewables. It targets predominantly brownfield assets in core European countries.
Jerome Neyroud, Head of Infrastructure Debt at Schroders Capital, said: “This latest fundraise marks an important milestone for Schroders Capital. Over the last decade, we have established a leading sub-investment grade franchise in European infrastructure debt as part of the wider growth of our private debt and credit alternatives business globally.
“The success of this latest fundraise is testament to the robust performance track record we have delivered for our investors as well as our sector expertise in managing the strategy through all market environments since its inception.
“Infrastructure debt is key to providing financing to essential projects in Europe, underpinning the fundamentals of the asset class. At a time of increased economic and geopolitical uncertainty, we provide a reliable source of income returns to investors in what is a complementary as well as defensive allocation within private debt by virtue of backing by essential real assets.”
Augustin Segard, Head of Junior Infrastructure Debt at Schroders Capital, added: “We continue to see significant growth in the sub-investment grade infrastructure debt market within Europe across several sectors. In recent years, digitalisation and energy transition trends have broadened the spectrum of risk/return available in the market.
“Infrastructure debt offers access to a unique set of non-corporate sectors within private debt, providing strong diversification for investors’ portfolios. The ongoing volatility following the recent bout of US policy uncertainty further re-enforces the case for infrastructure debt given its historical performance through dislocated markets.”
