Muzinich & Co, an investment firm specializing in corporate credit, has partnered with Hong Kong-based Orion3 Group to launch an infrastructure and real assets private debt strategy.

The strategy has raised in excess of US$120 million of seed capital and is targeting a size of between US$500 million and US$1 billion.

It will focus on providing debt financing and capital solutions for middle-market infrastructure and real asset companies. A key theme will be supporting businesses and projects on their energy and climate transition journey as the world moves towards net zero.

According to OECD estimates, US$6.9 trillion of investment is needed annually to meet development and climate needs globally. This situation is particularly acute in Asia-Pacific where the Asian Development Bank has estimated an annual requirement of US$1.7 trillion.

The strategy will focus initially on opportunities in Australia, Singapore, South Korea, Japan, Hong Kong, the United Kingdom, and Canada, with an ability to invest in deals in Southeast Asia, the Middle East and European Union countries.

It will combine Muzinich’s private debt expertise and Orion3 and CK Asset Holdings’ (CKA) strength in operating infrastructure and real assets to provide a compelling private debt proposition. CKA, a global conglomerate with capabilities across infrastructure and real estate, is a shareholder in Orion3.

“We are committed to bringing our clients a breadth of high-quality credit strategies across public and private markets. Expanding our private debt offering into infrastructure and real assets will enable clients to participate in the much-needed investment in sustainable infrastructure, while also providing diversification and a potential illiquidity premium over other asset classes,” says Muzinich chief executive officer Justin Muzinich.