Alinda Builds On Infrastructure Base

Firm: Alinda Capital Partners LLC
Fund: Alinda Infrastructure Fund II LP
Target: $3 billion
Placement Agent: C.P. Eaton Partners LLC

Fresh off the success of its debut vehicle, infrastructure specialist Alinda Capital Partners LLC has hit the road to raise its second fund. The firm is targeting $3 billion for Alinda Infrastructure Fund II LP, a global infrastructure fund that launched in January.

New York-based Alinda Capital launched fundraising for its first vehicle in September 2005 with a target of $1 billion and wound up accumulating $3 billion in commitments by the time the fund closed in June 2007; it was one of the largest debut funds ever raised. That fund was aimed at sectors such as transportation, energy, power, water and utility services for commercial industrial and residential customers. Alinda Capital declined to comment on the new fund, but a source familiar with the effort said Fund II will pursue the same investment strategy as Fund I.

Alinda Capital was formed in 2005 by Managing Partner Christopher Beale, a former global head of project finance at Citigroup, and four other investment professionals, three of whom also came from Citigroup. The firm now has a total of 25 professionals, including the five initial partners.

The firm used capital from Fund I to purchase the Detroit-Windsor Tunnel, four toll bridges in Alabama, three natural gas distribution facilities in Colorado, Nebraska and Wyoming, and UE Waterheater Income Fund, which owns and services more than a million residential hot water tanks in Canada, among other investments. C.P. Eaton Partners LLC placed the firm’s first fund and is said to be working on the current vehicle.

Around the time Alinda Capital hit the market with its first offering, Citigroup, CreditSuisse, Goldman Sachs and Macquarie each launched similar funds, boosting infrastructure’s profile in the United States. While infrastructure investing was old hat in countries like Australia, Canada and the United Kingdom, until recently it was a relatively unknown strategy in the United States.

Some limited partners took to it right away. California Public Employees’ Retirement System and Washington State Investment Board carved out dedicated pools of capital for infrastructure investing. But others such as New Jersey Division of Investment and the Michigan Department of Treasury are not attracted to the space at all. With the current volatility in the real estate market and many buyout firms stalled by the credit crunch, Alinda Capital is hoping more investors will take a look at infrastructure, our source said.—J.P.