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EQT in deal spree as €2.9bn third fund takes shape

The firm’s infrastructure division has made a €488m swoop for Delta Comfort, a telecoms infrastructure provider, while also investing in German firm GETEC.

EQT Infrastructure is nearing a “significant” first close for its third infrastructure fund which could raise as much as €2.9 billion, sources familiar with the fundraising said. In the meantime, the Swedish firm has kept busy on the deal front, agreeing deals for Netherlands-based Delta Comfort and German firm GETEC.

Both companies act as energy suppliers and operators of telecoms infrastructure services as well as being involved in TV, radio and broadband. EQT's investment in GETEC will see it take a 60 percent stake in a vehicle holding three subsidiaries of the German firm for an undisclosed amount, while it has parted with €488 million for the acquisition of Delta Comfort. 

Neither deal was agreed through EQT Infrastructure II, with sources close to the matter telling Infrastructure Investor that while it remains on the lookout for deals, the fund is becoming fully invested.

EQT Infrastructure III, on the other hand, is gaining considerable momentum, with a recent filing by the state of New Jersey Division of Investment revealing it is committing $100 million towards the new fund, while Investor AB, the Swedish private equity investor which founded EQT in 1994, will provide 10 percent of total commitments. The Maine Public Employees Retirement System also approved a €135 million commitment to the vehicle last month.

According to the filing from the investment manager responsible for seven pension funds in New Jersey, the third fund is targeting between 12 and 14 equity investments in mid-sized companies with ticket sizes ranging from €50 to €300 million. The fund has a 1.6 percent management fee, although this would be 1.5 percent at first close. It also has a 20 percent carry and a 6 percent hurdle rate.

Fund III will focus on the energy, transport, environmental, telecoms and social infrastructure sectors, but particularly on what the New Jersey board described as “sectors that have favourable market trends” while adhering to typical infrastructure characteristics”. The New Jersey board added that the third fund will “pursue the same strategy as its predecessor funds”.

The first fund closed in 2008 on €1.2 billion while the second fund closed five years later on €1.9 billion. According to the pension, EQT Infrastructure I has generated a 17.6 percent net IRR, a 2.39x multiple on invested capital and a 1.59x distributions to paid-in ratio. Meanwhile, EQT Infrastructure II has so far generated a 26.9 percent net IRR, a 1.82x multiple on invested capital and 0.93x on distributions.

The EQT infrastructure team has distributed about €3 billion to investors since it was formed in 2008, mainly due to eight exits from 18 portfolio companies, the New Jersey board noted. It added the exits generated a gross IRR of 35 percent and a 3.4x gross multiple on invested capital.

EQT declined to comment on its latest fundraising.