Goldman Sachs is preparing to go to the market in 2020 to raise its fourth infrastructure fund, said sources familiar with the situation.
The timing will coincide with how much capital its third USD 2.5bn fund, West Street Infrastructure Partners III, has deployed by that time. A source close to the situation said fund managers will look to raise their next fund only once West Street III is more invested than its current deployment level of little over 50%.
The fundraising market continues to remain receptive to infrastructure funds of all shapes and sizes in recent weeks as evidenced by Morgan Stanley Infrastructure Partners hitting 50% on the first close of its third fund’s USD 4bn target. Also, Blackstone Infrastructure Partners is nearing a USD 12bn final close on the inaugural phase of its open-ended fund.
West Street Infrastructure Partners III held a final close in July 2017 of USD 2.5bn having fallen short of its initial target of USD 3bn. The fund, a 2015 vintage, has a 15-year life.
The fund has made seven investments since 2015, according to Inframation Deals. In 2018, this included teaming with Antin Infrastructure Partners in a buyout of UK-based CityFibre and also ot acquired Restaurant Technologies, a provider of closed-loop automated cooking oil solutions to the US restaurant and hospitality markets.
Fund III typically takes controlling stakes in road, port, rail, airport, energy, pipeline, renewable, water, utility and telecom assets domiciled across member countries of the Organisation for Economic Co-operation and Development (OECD)– particularly Europe and North America. Fund III targets a gross IRR of 10%-15%.
The infrastructure group has had a personnel reshuffling of sorts in recent weeks that saw Edward Pallesen depart as head of infrastructure of the Americas for Goldman Sachs merchant banking arm and the recruitment of Cedric Lucas from KKR. The group is run globally by Philippe Camu out of London and Scott L. Lebovitz out of New York.
Goldman Sachs declined comment on the situation.