An increasing number of infrastructure fund managers are currently raising debt/mezzanine vehicles in order to compensate for the shortfall in available long term debt financing from traditional sources. The infrastructure debt fund market consists of both pure debt/mezzanine funds and funds that look to make both debt and equity investments.
Preqin Investor Network currently tracks 157 infrastructure funds on the road seeking an aggregate $95bn in capital commitments, with an average $637mn target size. Seventeen of the infrastructure vehicles currently in market are debt/mezzanine funds, targeting an aggregate $9.9bn and $619mn on average. In terms of location, nine debt/mezzanine infrastructure funds on the road are focused on Rest of World, followed by five such vehicles seeking investment opportunities in Europe and the remaining three targeting the US.
One of the largest debt/mezzanine funds currently raising capital is Harbourmaster Infrastructure Debt Fund, which is seeking €2bn in capital commitments. The vehicle is set to finance European infrastructure assets and focus on senior debt investments as opposed to mezzanine/sub-debt. Similarly, Cordiant Emerging Loan Fund IV (CELF IV) is looking to raise $1bn in order to invest in a diversified portfolio of infrastructure projects across emerging markets.