Climate Adaptive Infrastructure has so far raised around $250 million for the California-based asset manager’s inaugural fundraise, according to a source familiar with the matter.
The Climate Adaptive Infrastructure Fund has collected nearly a quarter of the investment vehicle’s $1 billion fundraising target from investors, the source told New Private Markets. The fund will invest to build out a “diversified portfolio of low-carbon infrastructure assets” targeting mid-teen net returns, the source explained.
CAI declined to comment on the fundraise.
After launching in Q3 of 2020, the fund is expected to hold its next, and possibly final, close within the next six to nine months. CAI is targeting control and non-control positions in assets in the water, transportation and energy sectors and will write cheques between $75 million and $100 million per deal, according to the source.
In January, CAI announced its first two investments from its inaugural fund. In one deal, it agreed to a partnership with the company Rye Development to fund the construction of 22 hydroelectric projects at existing dams in the eastern US. In another deal, CAI joined a consortium that provided financing to the utility-scale solar operator Intersect Power to fund future project development.
CAI launched in 2019 when Bill Green, a veteran of Macquarie’s infrastructure group, founded his own firm to focus on investments that reduce the carbon emissions of infrastructure at the construction stage or early in an asset’s lifespan. The firm uses a screening process for potential investments that weighs the physical risk and political and regulatory standing of whether an asset is well-suited for a greener and climate-friendly economy.
The firm has hired industry specialists as operating partners including Dan Reicher, the former director of climate change at Google, and Dominique Demessence, a former senior executive of Suez North America.