Global alternative investment firm H.I.G. Capital has raised $1.3 billion for its new H.I.G. Infrastructure Partners fund, targeting middle market infrastructure businesses. The fund aims to support sustainable, low-carbon emission enterprises with growth potential, addressing key global infrastructure challenges from traffic congestion to clean energy.
Despite the fund’s recent closure, H.I.G. has already begun deploying capital. The firm plans to invest in 12-15 companies, focusing on clean energy solutions, transportation alternatives, and renewable energy-based telecommunications.
H.I.G.’s strategy addresses industry concerns about rising capital in private infrastructure by targeting the midmarket sector. Ed Pallesen, one of the fund’s managing directors, explained, “There are a lot of very large pools of capital in the infrastructure space, but many fewer fund managers [focus] on the middle market. It’s very important to our strategy that we’re investing in the middle market.”
The fund’s acquisition of Northern Biogas, a renewable natural gas company, exemplifies this approach. Northern Biogas produces clean energy through anaerobic digestion of waste products. Pallesen highlighted the advantage of this technology: “All of the existing infrastructure—pipelines and other connections—that is built around traditional natural gas is equally available to renewable natural gas.”
In the telecommunications sector, H.I.G. has invested in Trail Ridge Power (TRP), a renewable power company focused on decarbonization, and acquired Tower Energy Professionals (TEP), a multidisciplinary engineering services provider for telecom and renewable energy.
H.I.G. Capital is known for accelerating growth in high-potential companies through strategic guidance and capital injection. For instance, its acquisition of North American Central School Bus includes plans to replace combustion engine vehicles with electric buses. Pallesen noted, “Electrification today is happening gradually and with government support. There is an element of government support that at least at the moment is necessary to help facilitate that transition.”
Addressing global concerns about reducing emissions in transportation infrastructure, H.I.G. has invested in EYSA, a Madrid-based company focusing on urban efficiency and sustainable mobility solutions. Andrew Liau, another managing director of the fund, commented, “We’re seeing very significant growth as municipalities and cities start to think about how to deal with growing populations and increased congestion and how to reduce emissions.”
This new infrastructure fund positions H.I.G. Capital at the forefront of sustainable infrastructure investment, targeting mid-market opportunities in rapidly evolving sectors.
