EQT closes debut infrastructure fund on €1.2bn

The Nordic buyout shop is the third private equity firm in the last three weeks to hold a closing on a Europe-focused infrastructure fund. EQT also joins a growing list of buyout shops that have made plans to enter the asset class this year.

EQT Partners has closed its first infrastructure fund on €1.2 billion, 20 percent above its original target.

The fund, which the firm says is a first of its kind in Northern Europe, will have investment capacity of €5 billion. It will primarily focus on medium-sized existing infrastructure operating assets and companies in Northern Europe, though it will have the ability to invest globally.

Potential targets will include regulated assets such as gas and electric utilities and telecom assets, concession-based infrastructure assets like ports and toll roads, social infrastructure and infrastructure-related service companies such as repair and maintenance companies. EQT will seek control or co-control positions in these targets. 
 
LPs in the fund include institutional investors such as AP4, Skandia, Pantheon Ventures, which is reportedly building an infrastructure fund of funds platform, and Varma Mutual Pension of Finland's Varma Mutual Pension Insurance Company. Investment professionals in Stockholm, Helsinki, Munich and New York will advise the new fund on deals.
 
EQT is the third infrastructure fund with a European focus to hold a closing in the last three weeks. Last week, London-based Infracapital, which will primarily look at projects in Western Europe and the UK, held its final close on £910 million (€1.1 billion; $1.3 billion) and a week earlier Dutch infrastructure fund manger DIF held an initial close for its second Europe-focused infrastructure fund on €200 million.

The firm also joins a growing list of buyout shops that have been turning to infrastructure. Earlier this year, Kohlberg Kravis Roberts announced plans to build out its infrastructure investment activities, while The Blackstone Group also has expanded its investment team in the sector.

EQT said in a press presentation the new infrastructure fund is part of its overall expansion strategy, which has seen it grow from a Nordic buyout firm to a multi-product alternative asset manager. Some of the firm’s competitors have grown by raising increasingly large funds, but EQT has opted to broaden its product range.

News of the firm's expansion into infrastructure broke in August of last year, when EQT's co-founder and managing partner, Conni Jonsson, sent a letter to about 280 investors saying that the firm intended to capitalise on the growing interest in and enthusiasm for public private partnerships in Scandinavian governments.

Infrastructure will mark its fourth product category, alongside its existing equity, expansion capital and opportunity funds. It has nearly €9 billion of committed capital in its five active equity funds, €675 million of capital under management in its two expansion capital funds and €372 million of committed capital in its opportunity fund, according to its website.