A fund that gives SMSFs and HNWs exposure to unlisted infrastructure assets like airports and toll roads is planning to raise $50 million in March.
Former Telstra Super head of alternatives Nicole Connolly's Infrastructure Partners Investment Fund clubs together money from smaller investors (minimum investment size of $50,000) to meet the minimums of large infrastructure funds, which range between $5 million and $25 million.
IPIFM invests this aggregated pool of capital in three infrastructure funds: AMP Capital Diversified Infrastructure Trust, a hedged vehicle for the GDIF Master Fund (managed by Colonial First State Global Asset Management) and Utilities Trust of Australia (managed by Morrison & Co).
Its investor base is split as 55% self-managed super fund investors and 45% high-net-worth individuals, family offices, university endowment funds and small corporate funds.
Connolly said the closed fund is looking to push up its current assets under management of around $117 million to about $200 million in the coming 12 months.
"We will do a capital raise of $50 million in March. Half of this will be offered on a pro-rata basis, as a priority to our existing investors and half will be open to new investors."
Connolly set up IPIFM about three years ago when she realised there was a gap in the market for smaller investors to access unlisted infrastructure assets, which are resilient to volatility and can provide bond-like returns while diversifying portfolios. Unlisted infrastructure asset funds have been traditionally been the domain of large superannuation funds and life insurers, as most smaller investors fail to meet the minimums.
IPIFM has a target return of 7.7% p.a. over a three-year period. This is split evenly between capital gains and income.
It is reviewing a fourth manager to add to the aggregator fund's lineup.
"If you look at the universe of [wholesale] unlisted infrastructure funds there only about eight funds," Connolly said.
"We are currently doing internal due diligence on a fourth manager which we might bring on in the next three to six months," she said.
The fund has almost no exposure to U.S. infrastructure assets but Connolly says one of their current managers, CFSGAM may add to the exposure in the future.