HONG KONG: US credit firm Muzinich & Co and Orion3, an Asian alternative investment platform, have launched an infrastructure and real assets private debt strategy as they seek to tackle the sector’s global funding gap.
The fund strategy, which launched yesterday, secured its first US$120mil investment, said Andrew Tan, Muzinich’s Asia Pacific chief executive officer.
Tan added that the firm is aiming to raise between US$500mil to US$1bil for the vehicle, while targeting a net return in the low teens on a blended basis.
The new venture between the New York-based company and Orion3, backed by Hong Kong developer CK Asset Holdings Ltd, comes amid a growing gap between funding needs and availability for global infrastructure investment.
The disparity is predicted to widen to around US$15 trillion by 2040, according to a Global Infrastructure Hub report.
Muzinich has come across many infrastructure deals that do not have access to bank funding, said Tan. This new strategy seeks to capitalise on this opportunity – “to provide financing in the capital structure and still get a very good risk-adjusted return for these investments,” he said.
This funding gap presents the private credit market with potential financing opportunities in infrastructure of around US$1.5 trillion over a five-year time horizon, according to a white paper published by Ares Management Corp in February. — Bloomberg
