BlackRock and China-led AIIB among backers of $800 million Asia-focused infrastructure fund

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Wind turbine blades rotate in the tidal flat in Yancheng city, Jiangsu province, China, November 18, 2023.
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Top global asset managers including BlackRock are among investors in an Asia-focused infrastructure private equity fund that raised $800 million, underscoring growing interest in the asset class amid market volatility.

The Seraya Partners Fund I closed above its target of $750 million, according to a statement Tuesday by its Singapore-based managers, Seraya Partners.

The fund targets mid-market investments aimed at enhancing energy transition and digital infrastructure development in Asia-Pacific markets and Southeast Asia.

“Infrastructure remains an attractive asset class,” said James Chern, chief investment officer and managing partner at Seraya Partners.

“Most major players have yet to put focus on capital deployment in the mid-market infrastructure space in Asia. The mid-market valuation is typically 30% lower than large cap deals in Asia, U.S., Europe deals generally.”

Investor interest in this asset class has been rising in the last few years, largely stemming from a desire for stable returns at a time of high inflation and heightened volatility in public markets.

KKR reportedly raised nearly $6 billion for its second Asia-Pacific infrastructure fund in October last year, closing seven months after its launch.

Seraya Partners counts China-led Asian Infrastructure Investment Bank (AIIB) and pension fund Alberta Investment Management among its major investors, as well as sovereign wealth funds and family offices from North America, Europe and Asia-Pacific.

The Asia-managed fund says it has already deployed half the money raised in three platforms.

The AIIB estimates $1.7 trillion of investment have to be made annually through 2030 to meet current demand for sustainable infrastructure.

“Asia’s rapidly expanding cities, intensifying climate change, and aging infrastructure have created a pressing need to address the region’s burgeoning trillion-dollar infrastructure gap,” said Chern, who was formerly with Morgan Stanley.

“Energy transition and digital infrastructure will be the twin engines to bridge this gap and lead us toward net-zero ambitions,” he said.