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NEW YORK (Reuters) – Private equity firm Stonepeak Partners is aiming to raise between $15 billion and $20 billion for its next flagship North American infrastructure fund to invest in assets such as utilities, data centers, ports and railways, according to people familiar with matter.
The fundraising plans underscore strong demand from investors for infrastructure assets, whose inflation-linked cash flows provide a shield from soaring prices. Stonepeak completed raising $14 billion for such a fund only nine months ago. Private equity funds of this size are typically spaced out by at least a couple of years to have enough time to deploy their capital.
Stonepeak has begun contacting investors to gauge their interest in the fund launch, which is expected next year, said the sources, who requested anonymity because the matter is confidential.
A Stonepeak spokesperson declined to comment.
Infrastructure funds, including Stonepeak, raised more than $50 billion in the second quarter of this year alone, up 25% from the previous year, according to data provider Preqin, underscoring to strong demand from institutional investors.
The predecessor fund, Stonepeak Infrastructure Fund IV, returned 1.08 times its investors’ money as of the end of June this year, according to the Oregon Public Employees Retirement Fund (PERS), which had made a $500 million commitment. Private equity funds typically take a couple of years to show returns while they invest the money they raised.
The prior $7.2 billion Stonepeak Infrastructure Fund III, which was raised in 2018, had returned 1.59 times its investors’ money, PERS data showed.
Stonepeak has also began raising its first global “core” infrastructure fund, with an initial target of $5 billion, and the firm is aiming to reach its first fundraising close by the end of this year, the sources said.
Unlike Stonepeak’s North America funds that have fixed durations – Fund IV has a 12-year maturity with the option to extend by three years – the core fund is open-ended, the sources said. The core fund aims to invest in infrastructure assets that provide inflation-linked profits stemming from long-term contracts. It will invest in assets in member countries of the Organization for Economic Co-operation and Development (OECD) in such sectors as transportation, communications and utilities.
Some of Stonepeak’s recent investments across its funds include a $2.4 billion deal to acquire Intrado’s emergency call-routing services unit and buying a 36% stake in Denver, Colorado-based data center provider CoreSite for more than $3 billion. Stonepeak also made its first Australian investment on Sunday by agreeing to buy GeelongPort, alongside superannuation fund Spirit Super, in a deal valued at A$1.1 billion ($732 million), sources told Reuters.
Stonepeak was founded in 2011 by former Blackstone (NYSE:BX) Inc executives Michael Dorrell and Trent Vichie. The New York-based firm has about $52 billion in assets under management spread across the Americas, Europe, Asia and Australia.
