I Squared Closes $2.4B Infrastructure Credit Fund

I Squared Capital has closed its second infrastructure credit fund at more than $2.4 billion, more than four times the size of its predecessor. Including more than $600 million in commitments and expected commitments to co-investment vehicles, total commitments to ISQ Global Infrastructure Credit Fund II reached $3 billion, double the strategy’s original $1.5 billion target.

The fund lends to midsize companies that own and operate essential infrastructure, including power generation and grids, fiber networks and data centers and ports, terminals and logistics.

Its loans are secured by physical assets and backed by contracted or regulated cash flows. The fund provides mostly senior financing across North America and Europe. It has already committed about 37% of its capital across seven investments.

“Infrastructure credit has become a standalone asset class,” said Gautam Bhandari, co-founder, managing partner and global chief investment officer of I Squared Capital. “We lend against power grids, fiber networks and ports – businesses that modern economies cannot run without.”

The raise marks a sharp turnaround for the strategy. Its first credit fund closed in June 2023 short of its $1 billion target.

I Squared is also raising its fourth flagship equity fund, ISQ Global Infrastructure Fund IV, which is targeting $15 billion and held a $10 billion first close earlier this year.

The close adds to a busy stretch for infrastructure lending. Foundation Credit recently closed a $540 million infrastructure debt fund focused on midsize U.S. projects.

Miami-based I Squared, founded in 2012 by former Morgan Stanley executives, manages more than $60 billion in assets.

Latham & Watkins LLP served as legal counsel to I Squared and the Fund.