Schroders Capital exceeds €320 million following first close of European sub-investment grade infrastructure debt fund

Schroders Capital is today announcing that it has raised over €320 million following an initial round of closes of its Schroders Capital Junior Infrastructure Debt Europe III fund (Julie III).¹

The fund, which is managed by Schroders Capital’s Infrastructure Debt team, was launched at the end of last year and aims to invest in sub-investment grade European infrastructure debt opportunities. The fund also has an Article 8 designation under the ² regulatory framework.

The fund attracted interest from Asian and European investors, with the strategy benefitting from higher yields in the current rising interest rate environment. Given the defensive nature of the asset class and its ability to benefit from inflation-linkage, infrastructure debt continues to prove its resilience through challenging markets, underpinned by robust credit quality in an environment where private debt assets and liquid credit alike face significant macro-economic headwinds.

It is the third vintage of this strategy whose previous fund (Julie II) was launched in 2020 and raised over €1bn. This was fully deployed in just over two years.

Julie III focuses on brownfield core assets in the European infrastructure mid-market, with an emphasis on delivering diversified debt exposure across countries and sectors. These entail assets which provide essential services, are capital intensive with high barriers to entry, have a long economic life, deliver long-term cash flows, benefit from regulated markets, and have low technological risk.

Examples of these opportunities encompass water and energy companies, railways, renewable energy portfolios, electricity grids, telecom, and roads. The fund also integrates environmental, social, and corporate governance (ESG) factors into its investment process.

Augustin Segard, Co-Head of Infrastructure Debt Investments and Fund Manager at Schroders Capital, commented:
​“For this third vintage of our sub-IG infrastructure debt strategy, we are maintaining our focus on high-quality, brownfield and core infrastructure assets. This historical positioning has proven to be beneficial as the two previous vintages performed strongly during the Covid-19 period and thereafter in a higher rate and inflationary environment. The strategy is all the more compelling with the higher yields on offer.”

Jerome Neyroud, Head of Infrastructure Debt at Schroders Capital, said:
​“We are pleased with this successful and promising first close in a challenging fundraising environment. This is testament to the relevance of the strategy in a more credit volatile environment. It also demonstrates the strength of our franchise that pioneered infrastructure debt in the European mid-market sub-investment grade space. This third vintage will enable us to maintain our leading position.”

Chantale Pelletier, Global Head of Infrastructure at Schroders Capital, added:
​“The strong interest from our current investors demonstrates the quality of the strategy and the strength of investments realised. Opportunities in the infrastructure investment space are being driven by key megatrends, including decarbonisation and energy independence as well as digitisation, and we continue to ensure we are well positioned to support investors.
​“Infrastructure projects form the basis of the world’s economy and are a key component in achieving climate targets. This reinforces Schroders Capital’s mission to position itself as an infrastructure specialist for our clients.”

Schroders Capital's Infrastructure team, which now comprises 28 people, has grown steadily since being established in 2015. Our investment team is one of the largest and most experienced in the market, having invested over €8bn in 140 transactions across 14 countries and 10 sub-sectors³.

¹ A Luxembourg Reserved Alternative Investment Fund.
​² Sustainable Finance Disclosure Regulation
​³ As of 31 March 2023

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Schroders Capital

Schroders Capital provides investors with access to a broad range of private asset investment opportunities, portfolio building blocks and customised private asset strategies. Its team focuses on delivering best-in-class, risk-adjusted returns and executing investments through a combination of direct investment capabilities and broader solutions in all private market asset classes, through comingled funds and customised private asset mandates.

The team aims to achieve sustainable returns through a rigorous approach and in alignment with a culture characterised by performance, collaboration, and integrity. ​

With $90.6 billion (£75.3 billion; €84.8 billion)* assets under management, Schroders Capital offers a diversified range of investment strategies, including real estate, private equity, secondaries, venture capital, infrastructure, securitised products and asset-based finance, private debt, insurance-linked securities and BlueOrchard (Impact Specialists).

*Assets under management as of 31 December 2022 (including non-fee earning dry powder and in-house cross holdings)