AXA raises €750m for third infra fund

The French fund manager is due to raise €1 billion by the end of November, with a further big-ticket commitment expected before the year is out. The potential sale of AXA Private Equity, expected to be concluded in November, might cause some delays to fundraising though.

France’s AXA Private Equity (AXA PE), the private equity arm of insurance giant AXA, has raised some €750 million for its third infrastructure fund, sources familiar with the fundraising told Infrastructure Investor.
 
The sources indicated there were a lot of investors conducting final due diligence on the fund, which is expect to hit the €900 million mark in October and €1 billion by the end of November. 
 
Additionally, a big-ticket commitment from a limited partner could also arrive before the year is out, taking the fund past €1 billion raised. AXA PE’s third infrastructure fund is targeting a final close of around €1 billion. While the fund does not have an official hard cap, AXA PE will not seek to raise more than €1.5 billion for the fund.
 
However, despite the above timeline, sources suggested the insurer’s plan to sell AXA PE might delay fundraising for a couple of months, as investors wait to find out the outcome of the sale before committing to the fund. In an official statement today, AXA confirmed that, “together with AXA PE, it has initiated a strategic review of its shareholding in the private equity firm which is a subsidiary of AXA’s management unit, AXA Investment Managers”. Credit Suisse is advising on the potential sale.
 
The French insurer said the strategic review – “which may or may not lead to a transaction” – is still “in a preliminary stage”. It also stated that any potential sale “would be structured with a view to preserving AXA PE investment expertise and performance-driven culture”. 
 
Sources close to the fundraising explained that AXA PE’s management – which owns about 5 percent of the business – is keen to use this opportunity to expand its stake in AXA PE either to a significant minority or even a majority holding – which could lead to a management buyout – alongside a potential new buyer or AXA itself, if the insurer ultimately decides against a sale of AXA PE. A decision on the fate of AXA PE is expected by November, the sources added. 
 
AXA PE’s third infrastructure vehicle made its first investment in February, when it acquired a 10 percent stake in Spanish oil storage and transportation firm Compania Logistica de Hidrocarburos, the first seed investment of the fund.
 
The private equity arm 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.