German asset management firm DWS Group has successfully raised €323 million (approximately USD$340 million) in the initial close of its ESG Infrastructure Debt Strategy (EIDS). This strategy is designed to invest in senior secured debt across several sustainability-oriented sectors, including renewable energy, energy efficiency, utilities, digital infrastructure, clean transportation, and projects focused on the circular economy.
DWS Group aims to further increase its fundraising efforts, targeting a total of €500 to €750 million for this infrastructure fund. The EIDS marks DWS’s second senior European infrastructure debt series, building on the deployment of over €850 million from its first vintage.
Benjamin Schmitt, Director of Infrastructure Debt at DWS, highlighted that this iteration of their senior debt strategy will allow institutional investors to access a diversified portfolio of debt investments. This approach not only promises stable yield income and downside protection but also contributes to the development of resilient and sustainable infrastructure in Europe.
The EIDS has drawn significant interest from institutional investors across the EMEA and APAC regions, primarily targeting senior infrastructure debt investments within continental Europe. The fund emphasizes directly negotiated transactions and mid-market private debt financing. DWS views this initial closing as a crucial milestone, facilitating the expansion of its foothold in the European infrastructure debt market, particularly within green and social infrastructure investments and sustainability-linked loans.
According to Sundeep Vyas, Head of Infrastructure Debt Europe at DWS, the appeal of infrastructure debt as an asset class continues to grow, driven by favorable risk-adjusted returns and a robust pipeline of investment opportunities. The EIDS is projected to deliver a target gross return of 5.5-6.5% per annum, with an annual distribution target of 5.0-6.0%. Notably, at least 50% of the fund’s investments will be aligned with the EU Taxonomy, and the strategy is structured to comply with the reporting requirements outlined in Article 8 of the EU Sustainable Finance Disclosure Regulation (SFDR).
Source: https://www.esgtoday.com/dws-raises-340-million-for-sustainable-infrastructure-fund/