Stonepeak this month held a final close for its Stonepeak Asia Infrastructure Fund on $3.3 billion, exceeding its target of $3 billion, putting the firm among the upper echelons for fundraising in the region.
The firm launched the 12-year closed-end fund, its first vehicle dedicated to making investments across the Asia-Pacific region, in 2021, targeting investments mainly within the digital infrastructure, transport and logistics, and energy transition sectors.
Hajir Naghdy, senior managing director and head of Asia and the Middle East at Stonepeak, told Infrastructure Investor the firm sees “compelling tailwinds” for those sectors across the APAC region – with the fund’s mandate allowing it to deploy capital across both developed and high-growth emerging markets.
“For this region, it’s about doing what we do well operationally on a global basis and finding opportunities here that play to those strengths”
“Most of the potential partners we spoke to for this fund were looking for a strategy that could capture these tailwinds in a thoughtful way. What resonated with our investors was our approach to the region which marries up the Stonepeak investment approach – which is about making strategic investments in defensive, hard-asset-backed businesses – with deep operational expertise in those sectors and the regional presence to capture those opportunities,” he says.
The fundraise takes Stonepeak into rarefied air in APAC infrastructure, meaning that it now has more than $5 billion of committed capital in the APAC region overall. The size of the latest close places the fund itself roughly level with Macquarie Asset Management’s Macquarie Asia Infrastructure Fund II, which closed on $3.31 billion in 2018, on the list of largest pan-Asia infrastructure funds by total capital raised.
The only larger funds to have been raised in this category to date are Macquarie Asia Infrastructure Fund III, which closed on $4.21 billion in 2022, and KKR’s two Asia funds, the first of which closed on $3.9 billion in 2021 and the second of which closed on $6.9 billion last month.
On what sets Stonepeak apart from these other large competitors, Naghdy says: “Everyone comes at it differently. For us it’s about bringing that global expertise and marrying it up with our local capability.
“We’re very sector-focused and that’s consistent firm-wide – if you look at the way we invest globally, it’s along the same sector lines. For this region, it’s about doing what we do well operationally on a global basis and finding opportunities here that play to those strengths.”
Stonepeak believes the economy is “at the front end of some really meaningful multi-decade tailwinds” in those target sectors, Naghdy says. In particular, the firm sees that APAC is “leading the energy transition globally, in some ways, at the moment” while in areas like transport and logistics there is huge opportunity for countries like Japan to catch up with similar-sized economic counterparts in Europe who have much larger “modern logistics” stocks.
Naghdy declined to comment on specific deals done by the fund, other than to say it has made six investments to date across its target sectors.
Infrastructure Investor understands that deals completed to date include an investment, alongside Stonepeak’s fourth flagship fund Infrastructure Fund IV, in shipping company Seapeak (formerly the New York-listed Teekay LNG), as well as the acquisition of a portfolio of Globe Telecom towers in the Philippines and an investment in logistics development and management platform Equalbase.
Naghdy says the fund secured support from a “diverse LP base” from across North America, Europe, APAC and the Middle East, with pension funds, endowments, insurance companies and other large institutions making up the mix.
On the value of creating a strategy tailored towards APAC investing for investors from that region, Naghdy says: “Our Asia presence gives us deeper insights into the region that help us invest globally.
“When we talk about global supply chains and the trend towards reshoring, for example, where we’re involved in the logistics thematic in this region it gives us a really good insight that informs how we think about transportation and logistics investments globally. It’s not such a direct link to say that an APAC strategy helps bring APAC investors into our global product mix, but it definitely helps how we invest globally to have a presence here.”
Naghdy also acknowledged that deploying capital across the APAC region comes with challenges that are quite distinct from deploying a North America-focused fund, or even a European fund.
“Each part of the region has its own interesting dynamics,” he says.
“Europe maybe has some similarities, given there are multiple markets – but we are still focused on having boots on the ground across our target markets and making sure we have real local experts on the team. Having those deep networks and a local presence is critical to navigating what are diverse markets.”
Naghdy points to the recent appointment of Sung Eun Ahn, former chief country officer at Deutsche Bank, as chair of Stonepeak’s business in South Korea, highlighting his deep experience in that market and his strong relationships there as a plus for the firm.
“You do have to be present in these markets to be able to navigate the challenges,” he says, while also highlighting that Stonepeak is the largest “independent” global infrastructure investment manager as a positive.
Stonepeak now has 49 staff based in the APAC region across offices in Hong Kong, Singapore and Sydney, as well as in Seoul and Tokyo – and is committed to the region for the long term, Naghdy says.
“The regional tailwinds we’re talking about are multi-decade, so there is a lot to do here over a long time,” he says.
“Our plan is to consolidate our position as the preferred infrastructure investing partner in the region and build on what we do well in each of our target sectors to really grow the business over time. There’s so much more to do and we’re bullish about the opportunity set and what we have ahead of us in the region.
“So we’re super excited about all of it – we don’t see energy transition, digitalisation or transportation logistics tailwinds waning at all in this region for a long time to come.”
Stonepeak also continues to raise capital for the latest iteration of its flagship North America-focused fund series, Stonepeak Infrastructure Fund V, which has a target of $15 billion.
