Japanese conglomerate Marubeni is considering launching a new fund management arm to target higher-risk infrastructure assets amid a drive by investors for higher returns.

Tokyo executives at the trading house have been weighing options to set up a new infrastructure GP, some six years after they moved into the space with the launch of MM Capital Partners (MMCP), said three sources familiar with the plans.

The GP would raise funds to invest in core-plus infrastructure assets internationally, according to the sources, in a bid to offer LPs higher returns than those targeted by MMCP, which invests in mostly core assets and aims for returns in the 9%-10% range.

The plans are at very early stages and no specific strategy has been defined so far, added the sources.

While MMCP was established as a joint venture with Mizuho and Asset Management One as minority shareholders, Marubeni is now considering options to partner with other established GPs for the new venture, according to the sources.

It could also seek to use any new core-plus fund to target assets in the US, which sits outside of the MMCP funds’ remit.

Marubeni invests in a wide range of infrastructure assets globally, ranging from transport to energy and renewables, mostly through its balance sheet.

Its MMCP unit raises capital from Marubeni itself and from other LPs, mostly smaller Japanese financial institutions, to invest in operational infrastructure assets in OECD markets outside Japan, across the transportation, energy, and social infrastructure sectors.

Its first fund reached final close at JPY 50bn (USD 332m) in 2021, while its second fund is aiming to raise the same amount by year-end.

The funds have invested in assets ranging from metro and hospital PPPs in Australia, to wind and solar plants in Portugal and a gas utility in the Baltics.

Marubeni is not alone among infrastructure investors considering moving up the risk curve.

Australia’s IFM Investors, which is best known for its core-focused open-ended USD 60bn Global Infrastructure Fund, is also readying its first USD 2bn-USD 3bn global value-add infrastructure fund to target net returns of 12% to 16%, Infralogic reported in August.

A spokesperson for Marubeni did not respond to a request for comment.