Independent fund manager Equis has decided to drop its fundraising activities and to launch instead a new infrastructure development firm, two sources told Infrastructure Investor.
Institutional investors will be able to acquire stakes in the new developer, while the Equis management team will hold a “significant minority stake”, the sources said, without providing further details.
The new firm, which will also be called Equis, is expected to raise $1 billion in equity, a portion of which will come from the company’s founders, both sources confirmed.
“From Equis’ point of view, this will provide greater alignment of interest, as the management team and investors will own equity [in] the same vehicle,” one of the sources said.
The partners are looking for “sophisticated, long-term investors” to join the capital structure of the new firm, one of the sources said.
Since investments will not be structured as a blind pool fund, they won’t be subject to management and performance fees, the source added.
Returns on investment could exceed 60 percent, this person said, adding that, under the current fund structure, Equis has achieved average returns of more than 35 percent on its realised investments.
The Singapore-based team has agreed to commit “100 percent” of their time to the developer, ruling out fundraising or managing other investment vehicles, Infrastructure Investor learned.
According to one of the sources, Equis has already fully deployed its two flagship funds and other vehicles raised, and currently holds “very few assets” that will exit “in the near future.”
According to the Equis website, the company still holds five assets in its portfolio, across the hydropower, telecommunications, biomass and gas distribution sectors.
It is unclear whether the fund management company will cease to exist once the development company has been launched, but the source reiterated that the management team will be “fully focused” on the new firm.
According to its website, the fund manager has raised over $2.7 billion since it was founded in 2011. The firm closed the largest renewables deal ever after selling its renewables platform, Equis Energy (now Vena Energy) for $5 billion to a consortium led by Global Infrastructure Partners in 2018.
The new entity will still invest in renewables, although it will also explore other infrastructure sub-sectors in Asia, one of the sources said, without providing further details.
Last October, a source told Infrastructure Investor that Equis was aiming to raise a $2 billion fund, Equis Asia Fund III, that would move away from renewables and focus instead on biomass, healthcare infrastructure, PPPs and water and waste management infrastructure.
Equis declined to comment for this story.
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