Alterna Closes Fund Shy Of Target

Alterna Capital Partners has closed a debut infrastructure fund of $428 million earmarked to invest in assets in the transportation, industrial and energy sectors, such as oil and gas storage facilities, rail cars and ships. The firm invests mainly in North America and Western Europe, but also in Japan and Australia.

Although it took two years, the Wilton, Conn.-based firm made slow, steady progress with its fundraising for Alterna Core Capital Assets Fund LP, winning pledges from a relatively small number of public pensions and funds of funds. In January, the Arizona Public Safety Personnel Retirement System committed up to $40 million to the fund, plus co-investment capital of up to $30 million. A first close of $229 million took place in the first quarter. The firm originally had a $1 billion target.

Alterna Capital intends to write checks of between $20 million and $80 million for control or shared control stakes with like-minded investors, said James Furnivall, managing partner. The firm buys portfolios of assets from institutional investors, originates transactions directly from users and manufacturers, and buys companies that own a lot of hard assets, such as shipping companies.

Alterna Capital has closed its first deal, acquiring an interest in the coal-fired Springerville Power Generating Station in Springerville, Ariz. The facility is leased to Tucson Electric Power, which supplies power to a large part of southern Arizona, until 2015.

Founded in 2007, Alterna Capital has seven investment professionals. Of the four founders, Furnivall spent 11 years at Canaan Partners, a venture capital firm; the other three, Roger Miller, Eric Press and Harry Toll, all came from Citigroup’s core capital assets investment business.

C.P. Eaton Partners placed the fund; Orrick Herrington & Sutcliffe LLP served as legal adviser.