UBS closes €570m infra debt fund

A majority of institutions that committed to the vehicle, which is already more than one-third deployed, are first-time investors in infrastructure debt.

UBS Asset Management has reached a €570 million final close on Archmore Infrastructure Debt Platform, its debut infrastructure debt fund.

The firm received commitments from 17 institutional investors comprising insurance companies, pension funds and family offices across eight European countries and Japan, it said in a statement.

Speaking to Infrastructure Investor, Tommaso Albanese, head of infrastructure debt at UBS Asset Management and the fund’s chief investment officer, said a majority of these investors were making their first foray into infrastructure debt through their commitment to the vehicle. This was a reason why the fund reached its final milestone later than its target closing date of March 2016, he explained.

“Insurance companies and pension funds have started to move allocations into infrastructure debt and I think there is a compelling argument for investing in this asset class. Given the low interest rate environment, investors are shifting their allocations from fixed income to alternative assets, including private debt. This is offering higher yields while maintaining an investment-grade risk profile.”

After a first close in September 2014, the fund deployed €220 million into four investments spread across the transport, energy, renewables and social infrastructure sectors in Denmark, France, Spain and Belgium. Albanese said he hopes to make further investments within the next six to nine months based on a minimum ticket size of €50 million to €100 million, following what he described as a “quite selective and disciplined” approach.

“Our strategy is primarily [focused] on mid-sized alternate lending deals which typically require more in-depth analysis and structuring expertise but can offer more attractive returns,” he explained.

Albanese said UBS is also eyeing the launch of further infrastructure debt platforms once the capital of its debut offering is fully deployed.