Morgan Stanley Is Close to Launching Third Infrastructure Fund

(Bloomberg) -- Morgan Stanley is set to begin raising its third infrastructure fund, according to people with knowledge of the matter.

The firm’s infrastructure unit, which is part of Morgan Stanley Investment Management, is planning on formally wooing investors starting early next month, said one of the people, who asked not to be named because the matter is private. Morgan Stanley is poised to seek more than the $3.6 billion it raised in 2016 for its second fund, the person said. It’s unclear what the firm’s final target will be, but rivals including I Squared Capital, Stonepeak Infrastructure Partners and KKR & Co. each raised $7 billion or more in recent months.

A Morgan Stanley representative declined to comment.

Morgan Stanley’s existing infrastructure funds, known as North Haven Infrastructure Partners I and II, count the Teacher Retirement System of Texas and the California Public Employees’ Retirement System among their biggest investors, according to data compiled by Bloomberg.

The capital raising comes despite the fact that President Donald Trump’s administration has yet to move ahead with an infrastructure plan that could spur a wave of private investment in roads, airports and other projects. Like some of its global rivals, Morgan Stanley has remained active elsewhere, investing in telecommunications towers in Portugal as well as midstream assets in the Delaware Basin, an oil and gas region that straddles West Texas and New Mexico.

Infrastructure funds raised a quarterly record of $37 billion in the three months ended Sept. 30, according to data provider Preqin. Dry powder -- or the amount of capital that’s able to be spent -- sits at $173 billion, up from $159 billion at the end of last year.

To contact the reporter on this story: Gillian Tan in New York at gtan129@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Daniel Taub, Dan Reichl

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