Singapore’s Keppel Corporation aims to hit its USD 2.5bn target for its Keppel Core Infrastructure Fund (KCIF) by the end of 2025, KCIF’s CEO Jee Kim and Investment Director Jonathan Poon told Infralogic.

KCIF, being an open-ended fund, will seek commitments on an ongoing basis over the next two years. It does not have a hard cap.

Keppel is in talks with several placement agents for the fundraising and hopes to broaden its client base to include Europe and the US, the executives said, who noted that KCIF marks Asia’s first core infrastructure fund.

“We anticipate that educating [potential new clients] about the APAC infrastructure market and familiarising them with Keppel’s brand in the context of our APAC-focused core strategy may take some time,” said Kim.

The fundraising environment has also been stifled amid rising interest rates and macro uncertainties, which have seen a greater impact on core funds.

Launched in late 2022, KCIF reached a first close of USD 575m earlier this October, as announced.

KCIF is actively evaluating a couple of transactions within its core investment sectors and expects its first deployments to be made in Australia, New Zealand, or South Korea.

The fund seeks to make eight to ten investments in total with equity cheques ranging from USD 100m to USD 300m, excluding co-investments.

The fund prefers making control deals and adopts a buy-and-hold approach, charging performance fees based on cash yields. “The evergreen structure of KCIF was chosen to mirror the long-term lifespan, stable cashflow profile of core infrastructure assets,” said Kim.

KCIF focuses on three sectors: economic and social, such as waste, utilities, and transport; energy transition opportunities including district heating systems, hydrogen-ready gas plants, as well as renewables; and digital infrastructure including telecom towers, fibre, and subsea cables.

Besides Australia, New Zealand, and South Korea, the fund also targets investing in Japan and Singapore.

KCIF seeks a gross internal rate of return of 9%-10% and cash yields of 5%-6%. The fund targets assets with availability-based concessions or contracted revenue supported by long-term off-take contracts.

Besides KCIF, Keppel also operates Keppel Asia Infrastructure Fund – a private, growth-focused vehicle targeting operating businesses and projects.

Investments include Marshall Islands-headquartered LNG carrier owner Gimi MS Corporation, Singapore-based rooftop solar developer Cleantech Renewable Assets, South Korea’s waste treatment company Eco Management Korea, and Singapore’s waste collector 800 Super.