Morgan Stanley said on Thursday it had raised $3.6 billion for its second infrastructure fund, North Haven Infrastructure Partners II, making it the latest Wall Street firm to target the sector.
Investors are increasingly looking to infrastructure as an alternative to low-yielding fixed income products with more stable returns than traditional private equity.
Morgan Stanley said it had also received commitments for up to $2.2 billion more from investors in NHIP II, including from public and private pension funds, sovereign wealth funds and insurance companies, bringing the total capital available raised for the fund to $5.8 billion.
The fund, which will invest in assets in the energy, utilities and transportation sectors, is part of its investment management division led by Dan Simkowitz, who took on the role last October. The division had more than $406 billion in assets under management at the end of last year.
Energy in particular is seen as an attractive area for outside investment as large companies are under pressure to sell off assets amid a sharp decline in oil prices.
Morgan Stanley's first infrastructure fund raised $4 billion. The firm's various investments in infrastructure include parking meters in Chicago, natural gas gathering pipeline system Eureka Hunter and a company that manages Italian airports.
"A lot of investors have been switching out of fixed income," said Markus Hottenrott, chief investment officer for Morgan Stanley Infrastructure. "They want higher returns but still expect a long-term, predictable nature that infrastructure provides."
ArcLight Capital Partners last year closed a $5.6 billion fund focused on energy infrastructure investments and KKR & Co LP also closed a $3.1 billion fund.
Global Infrastructure Partners is seeking to raise as much as $15 billion for its third fund, according to reports last year.
The amount of uninvested capital from infrastructure funds topped $108 billion in 2015, an all-time high, according to market research firm Preqin, as firms look to raise large funds while facing competition for assets.
(Additional reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza and Alan Crosby)