Exclusive-US investor Stonepeak seeks to raise $4 billion for second Asia infrastructure fund, source says

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By Yantoultra Ngui and Kane Wu

SINGAPORE/HONG KONG (Reuters) -U.S.-based investor Stonepeak is seeking to raise as much as $4 billion for its second Asia-focused infrastructure fund, a source with direct knowledge of the plan said, as investors seeking lucrative long-term returns drive a wave of new investments in the region.

Stonepeak expects to reach $1 billion, or a quarter of its target, by the end of this month, four months after its launch in May, according to the source, who declined to be named as the details are not public.

The fundraising comes just a year after the firm closed its first Asia-focused fund at $3.3 billion, signalling swift capital deployment and strong investor interest in the asset class.

A spokesperson for Stonepeak, which began investing in Asia in 2019 and manages $76.3 billion in assets globally, declined to comment on the fundraising, which has not been reported previously.

The firm’s fundraising plan comes as many countries in Asia, faced with geopolitical uncertainties and climate change targets, seek to increase their infrastructure spending to sustain economic growth and living standards.

Developing Asia needs to spend around $1.7 trillion a year on infrastructure between 2023 and 2030 “if the region is to maintain its growth momentum, eradicate poverty, and respond to climate change,” according to the Asian Development Bank.

In Asia, besides the traditional infrastructure areas, global investors said they were also increasingly targeting sectors that are opening up new investment opportunities, such as data centres and logistics.

Cold storage logistics, for example, has become a key focus for Stonepeak, driven by changing diets and rising protein demand, said Hajir Naghdy, the firm’s senior managing director and head of Asia and the Middle East.

A “multi-decade” trend of rapid urbanisation has created a generational infrastructure investment opportunity in Asia, he added.

Other global investors have also been increasing their firepower in Asia. KKR has begun fundraising for its third pan-Asia infrastructure fund, though it did not disclose the target size, filings with the U.S. Securities and Exchange Commission showed.

KKR’s new vehicle is expected to exceed the $6.4 billion raised for its Asia infrastructure fund last year, said a separate source with knowledge of the fundraising plan.

KKR declined to comment.

STABLE ASSETS

KKR is applying private equity-style strategies to businesses that are slightly higher on the risk spectrum but still behave like infrastructure firms, said Andrew Jennings, a managing director at the U.S.-based firm.

In July, KKR, which has about 30 infrastructure-focused investment staffers in Asia, struck a deal to buy ProTen, one of Australia’s largest broiler chicken growers, from pension fund Aware Super.

“It is really trying to find assets that are stable and steady, that will give you yield and some capital growth,” Jennings said.

I Squared Capital, which entered Asia in 2012, is also planning to add around 10 more people in the region over the next two to three years and will open a Seoul office in the coming months, senior partner Harsh Agrawal said.

The U.S.-based infrastructure investor is betting on the energy transition, digital infrastructure and logistics as long-term growth drivers.

In June, Switzerland-based Energy Infrastructure Partners launched its first Asia office in Singapore, aiming to raise and deploy capital into energy transition assets and originate deals in markets like Australia, Japan and Korea.

“We see Singapore as our launch pad to build relationships, deploy capital, and eventually originate investments in some of the region’s most advanced markets,” said the firm’s partner and co-head of investments Peter Schümers.

(Reporting by Yantoultra Ngui and Kane Wu; Editing by Sumeet Chatterjee and Thomas Derpinghaus)