This new fund has targeted raising £500 million ($664 million) of capital and a return of Libor plus 4-5 per cent.

Global investment manager Schroders has launched its first UK-dedicated infrastructure debt fund, with a focus on UK pension funds and insurance companies.

The Schroder UK Infrastructure Debt fund will target junior loans in the transport, energy, environmental, social infrastructure and telecoms sectors in the UK, focusing on high-yield opportunities in the market, the firm said in a statement.

Schroders’ infrastructure team, led by Charles Dupont, head of infrastructure finance, will manage the fund. This new fund has targeted raising £500 million ($664 million) of capital and a return of Libor plus 4-5 per cent. The fund has a 10-year maturity inclusive of the investment period.

The infrastructure team, which was launched in September 2015, already runs three infrastructure debt funds and two segregated accounts dedicated to investment opportunities in Europe. It has raised and deployed €1.4 billion ($1.7 billion) in capital since its launch.

“The UK is the most significant infrastructure market in Europe and boasts a strong pipeline of infrastructure debt opportunities," said Dupont. “Crucially, institutional investors in need of yield will benefit from diversifying into this asset class, whose secure income streams have often proved to be resilient to economic and financial cycles.”

The firm has been busy launching funds, as this publication recently reported on the launch of Schroders' global multi-factor equity (GMFE) fund.