I Squared Capital aims to hit a first close at USD 8bn-USD 9bn for its fourth and latest flagship global infrastructure fund, according to two sources familiar.

The target is USD 15bn.

ISQ Global Infrastructure Fund IV, which formally launched in March, seeks to reach a first close after the northern summer, one of the sources said. It began marketing talks pre-launch in January this year.

According to public information, limited partner (LP) commitments to Fund IV so far include:

• Pennsylvania Public School Employees’ Retirement System (PSERS), USD 200m
• Fubon Life Insurance, USD 130m
• The Illinois Firefighters Pension Investment Fund, USD 27m

I Squared Capital will commit 2%, or USD 300m, to Fund IV.

The new vehicle will follow the same strategy as its predecessors, although the cap for non-OECD investments is 25% versus 33% in previous vintages, said one of the sources.

The manager has established a separate growth markets strategy, for which it is currently fundraising for the second vehicle.

ISQ Global Infrastructure Fund IV will focus on power and utilities, digital, transport and logistics, social infrastructure, and environmental infrastructure, according to PSERS’ investment recommendation letter.

Fund IV will target 25-30 investments with average equity cheques ranging from USD 400m to USD 1bn, in line with its predecessor, the letter shows. At least 60% of the fund capital will be deployed in platform opportunities, using roll-up and buy-and-build strategies.

The new fund targets an 11%-16% net internal rate of return, according to the letter.

Fund III, which closed above target at USD 15bn in 2022, will be nearing full deployment before this year-end, one of the sources said. Recent deals include British bus and train operator Arriva, UK-headquartered waste management firm Enva, and US-based distributed energy company RPower, according to Infralogic.

Miami-headquartered I Squared Capital has 280 employees including 108 investment professionals, the letter shows.

With USD 45bn in assets under management, the manager operates from offices in Abu Dhabi, London, Munich, New Delhi, São Paulo, Singapore, Sydney and Taipei, with plans to open a new office in Riyadh this year.

I Squared Capital declined to comment.