Morgan Stanley on Monday announced that it had raised a $4bn private equity fund dedicated to infrastructure projects – the latest move by a fund manager into sectors and countries that have not been affected by the financial crisis.

The fund, which already owns stakes in Venice airport in Italy and the Port of Montreal in Canada, is one of the biggest raised and vastly exceeded its original target of $2.5bn.

Private equity experts say infrastructure is one of the hottest asset classes as investors seek to move funds away from the credit crunch and the US economic slowdown.

The need for vast infrastructure improvements in emerging markets is also attracting fund managers keen to tap into the fast-growing economies of the Middle East and Asia.

James Gorman, Morgan Stanley’s co-president, said: “The successful fundraising underscores the particular demand for infrastructure investment and, broadly, for alternative assets that generate long-term stable cash flows.”

The investment bank, which in recent years has made increased use of its balance sheet to invest in private equity and hedge funds, provided about $400m of its own resources to the fund.

The fund plans to target investments across the globe, particularly in energy, utilities and transport. Sadek Wahba, chief investment officer and global head of Morgan Stanley Infrastructure, said it could invest up to a quarter of its resources in developing countries.

He said Morgan Stanley’s banking and client relationships in countries such as China and India would help the find opportunities and finance its deals.

The fund, which has invested $500m of its capital, has offices in New York, London, Hong Kong and Beijing and wanted to open in Mumbai, Mr Wahba said.

Dismissing suggestions that the market for infrastructure investments was becoming crowded with private equity groups, hedge funds and investment banks competing for deals, Mr Wahba said the need to upgrade projects in developing and developed countries outstripped the private sector’s ability to invest in the sector.

Mr Gorman said the decision to raise such a large fund was part of a strategy to take Morgan Stanley’s asset management division into a “more sophisticated space” to meet client needs and diversify its earnings streams.

“Infrastructure, private equity and hedge fund investments bring Morgan Stanley a source of revenues and earnings that fall outside the traditional capital market space,” he said.

Morgan Stanley’s move is part of its efforts to boost its presence in private equity. The strategy is aimed at competing more effectively with Goldman Sachs, which has reaped rich returns from its private equity funds.

In recent years, Morgan Stanley has hired a number of private equity executives, including some from Goldman, and devoted more resources to private equity investments.