AXA PE nears €1bn for Fund III

The French private equity firm is on track to raise €1.5bn for its third infrastructure fund. The close is dependent on the spinning-out of AXA Private Equity, which may be announced by the end of July.

French private equity firm AXA Private Equity (AXA PE) is making good progress on its third infrastructure vehicle and looks set to hit its €1.5 billion target, sources familiar with the process told Infrastructure Investor.

AXA PE has currently amassed just south of €1 billion for Fund III – although signed commitments amount to around €840 million – with several investors currently in the midst of final due diligence. However, some limited partners are still waiting on the fate of the private equity arm, due to be spun-out, before committing to Fund III.

As a result, AXA PE has extended its closing deadline for Fund III by six months, to give investors enough time to conduct due diligence, sources said.

If all goes according to schedule, the private equity unit could announce its spin-out by the end of July, one source said, although another warned the process may still take substantially longer to complete.

While the final structure is not yet known, it appears that employees and top management will retain a significant stake in the business. AXA Group will keep a minority stake in AXA PE, with new entrants like Canada’s Caisse de Dépot et Placement du Québec and Singapore sovereign fund GIC also coming onboard as partners, among other smaller investors.

In the meantime, AXA PE has kept busy, having already invested over €500 million of Fund III – about a third of the total fund target.

Its latest transaction has been the €330 million acquisition of a 23.48 percent stake in Luxembourg utility Enovos from ArcelorMittal, announced in early May. But AXA is expected to free up capital from the deal, with an equity syndication to co-investors underway.

AXA PE already has two prior infrastructure funds. The first was a €200 million vehicle formed specifically so that it could acquire a stake in SANEF, the French motorway operator. Its second fund closed on €1.1 billion. Like its two predecessors, Fund III is also expected to focus on investments across France, Italy, Germany and the UK.