Alinda Capital Partners later today will announce that it has closed its debut fund with $3 billion in capital commitments. Alinda is part of the new wave of infrastructure-focused private equity funds, and was launched last year by Chris Beale, former global head of project finance at Citigroup (and at Morgan Stanley and CSFB, before that), and other members of his Citigroup team.
Alinda originally went to market with a $1 billion target, but agreed to set a $3 billion hard cap earlier this year. Dane Vene, a principal with fund placement agent C.P. Eaton, says that the original thinking was to raise the first billion on Beale’s track record, and then return to market in a year or two. But he says that oversubscription came quickly, to the point where many LPs were cut back 20% or more. He adds that few institutional investors have dedicated infrastructure buckets, but rather that Alinda would sometimes meet with PE specialists, sometimes with real estate specialists and sometimes with fixed income specialists. And sometimes with all of them.
I also spoke briefly with Beale this morning, and asked him why infrastructure has become such a hit private equity sub-sector. He said the following:
“The macro-economic change going on is that U.S. governments at all levels — federal, state and local – are short of money and their infrastructure needs are great. Not only do they need to fix existing infrastructure, but also build new infrastructure. Many state governments used to tap the bond markets, but quite a few have lowered their debt ceilings. So now they’re turning toward asset sale, and public/private partnerships, which is where firms like Alinda come in. This is just a recent trend on a large scale in the U.S., but is something that occurred ten to twelve years ago in places like Australia and England. We’re playing catch-up.”