Alternative asset manager Gresham House has announced the final close of its second sustainable infrastructure fund at £450 million.
The British Sustainable Infrastructure Fund (BSIF) II and its side-car vehicles raised the equity for real asset-based solutions to environmental and social challenges facing the UK.
Gresham House said in a statement that BSIF II adopts a holistic approach to infrastructure investment. The fund will invest in appropriate solutions to regional social and environmental challenges.
Investments include gigabit-capable broadband connectivity in Cornwall, innovative waste recycling solutions in the North East and vertical farming in Staffordshire and East Anglia.
BSIF II has received backing from 12 investors including eight leading local government pension schemes and four family offices.
Gresham House said the BSIF strategy has a track record of delivering strong financial returns and positive impact. BSIF I’s return on investment to date has been double its stated target of 8-10% with a net IRR of 16.2% as at June 2023.
“Investors are looking for innovative investment opportunities that support regional levelling up and the green agenda in the UK,” said Heather Fleming, managing director, institutional business at Gresham House. “We are giving LPs a platform for place-based investment, providing exposure to our portfolio companies and supporting the regions and sectors that most align with their sustainability targets.”
Cornwall Pension Fund and Bedfordshire Pension Fund are the latest to join Worcestershire Pension Fund, Teesside Pension Fund, Staffordshire Pension Fund, Greater Manchester Pension Fund, Torfaen Pension Fund and East Riding Pension Fund as LGPS investors alongside other existing LPs.
The portfolio has a controlled pipeline of more than £2 billion so the £450 million raised will be quickly deployed into existing BSIF platforms according to Gresham House.
Peter Bachmann and Simon Adcock, Co-Fund Managers of the BSIF Strategies, commented: “We are very pleased to have welcomed eight new LPs to BSIF II, and believe our focus on impact driving returns will perform well financially whilst capturing the attention of forward-thinking real asset investors. BSIF II is the next step for our platform, which we look forward to continuing to scale with future funds.