EQT eyes Q1 2019 final close for Fund IV – exclusive

EQT Partners is planning to hold a final close on its fourth infrastructure fund in the first quarter of next year, Infrastructure Investor understands.

The Stockholm-headquartered group is targeting €7.5 billion for the vehicle, which began fundraising last month, and has set a €9 billion hard-cap, although a source said EQT has already about €20 billion in demand.

The fund is believed to be set to continue the strategy pursued by its predecessors, following what it has described as an “industrial approach”, targeting sectors such as telecoms, transport and services assets. A global strategy is being targeted by the fund, with the firm’s 25 previous investments based in Europe and North America.

EQT declined to comment on the fundraising.

EQT’s previous three funds are understood to be generating collective gross IRRs of 20-25 percent and a 3x money multiple. The first 2008-vintage €1.2 billion vehicle has been fully exited, while EQT Infrastructure II, which closed on €1.9 billion in 2013, has exited four of its 11 investments.

The third fund closed on €4 billion in February last year and has made six investments, four of which were in the European and US telecoms sectors, such as acquisitions of Dutch group CAIW and South Carolina-based Spirit Communications.

The previous fund initially had a €2.9 billion target when it launched and Lennart Blecher, head of EQT Real Assets, told Infrastructure Investor in March 2017 that the fund “could have been up there [with GIP and Brookfield] if we wanted to because the demand was just enormous”.

Some 30 percent of Fund III’s commitments originated from Europe, Middle East and Africa, excluding Nordic LPs who committed 29 percent of the capital. This was supplemented by 21 percent from North America and 20 percent from Asia. The origins of the capital for Fund III were a marked difference from Fund II, in which Nordic investors provided 40 percent of the total, with 19 percent coming from the rest of Europe.