DIF Capital Partners beats targets after raising €6.8bn for two infrastructure funds

March 8, 2024 (Preqin News) – Netherlands-headquartered infrastructure specialist DIF Capital Partners has beaten its fundraising targets to raise €6.8bn ($7.4bn) at final close for its two latest funds targeting investments in areas including digital infrastructure, sustainable transportation, and the energy transition.

DIF Infrastructure VII (DIF VII) closed at €4.4bn ($4.8bn), exceeding a target of €4bn ($4.4bn), while DIF Core-Plus Infrastructure Fund III (CIF III) had a final close at €1.6bn ($1.8bn), surpassing a €1.5bn target. The firm, which has €17bn ($18.6bn) of AUM, also raised €800mn ($875.1mn) for co-investment vehicles.

The two funds secured commitments from 110 existing and returning investors, including private pension plans, sovereign wealth funds, and financial institutions from Europe, the Americas, and the Middle East. Both are larger than their predecessors: DIF VI secured commitments of €3bn ($3.3bn) while CIF II closed on €1bn ($1.1bn).

While infrastructure fundraising has slowed in recent years, assets tied to the energy transition and digital infrastructure are seen as bright spots for the asset class. According to the Preqin 2024 Global Report: Infrastructure, ‘tailwinds from the energy transition will continue to underpin the long-term growth of unlisted infrastructure’.

‘An ever-growing demand for infrastructure capital provides an exciting investment opportunity for us,’ said Gijs Voskuyl, Deputy CEO at DIF Capital Partners in a statement announcing the fundraising.

Both funds will pursue strategies in Europe and North America, investing in greenfield and longer-term operational investments.

DIF VII’s infrastructure investment targets are often concession-based or with long-term offtake agreements in sectors including transportation, renewable energy, digital infrastructure, and utilities, it said. At the same time, CIF III focuses on infrastructure sectors including digital infrastructure – specifically data centers and fiber – as well as energy transition and sustainable transportation.

Both funds have already made nine investments each and have deployed almost 50% of the raised capital.

According to Preqin data, infrastructure funds closed at 94% of their target size on average in 2023, the lowest reading since 2015 and the first time the figure has fallen below 100% since 2020.

Annual infrastructure fundraising has been in decline since 2021 on an annual basis, although the sector ended 2023 on a brighter note. The fourth quarter of 2023 saw $68.3bn raised by infrastructure funds, Preqin data shows, eclipsing the previous quarterly record of $66.2bn accrued in the first three months of 2022.

Founded in 2005, DIF Capital Partners announced in September that alternatives asset manager CVC had purchased a majority stake in the firm, part of a string of acquisitions in the sector where smaller infrastructure investors have been acquired by larger counterparts. Closure of that transaction is subject to regulatory approvals and is expected in the second quarter of this year, according to DIF.

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