Equis targets $2bn for new fund as it shifts away from renewables – exclusive

The new vehicle will focus on biomass, healthcare infrastructure, PPPs and waste and water facilities, as Asian renewables ‘heating up’.

Equis will launch a new fund in the first quarter of 2019, aiming to raise $2 billion by the end of next year, a source familiar with the new strategy told Infrastructure Investor.

Equis Asia Fund III will focus on the development and operation of assets in sectors including biomass, healthcare infrastructure, PPPs and waste and water infrastructure, the source said.

While the firm isn’t ruling out new investment in renewables in the Asia-Pacific region, it believes the sector is “heating up” and wants to move to new industries “with less competition,” the source added.

Equis closed a record-breaking $5 billion deal in January when it sold its renewables platform Equis Energy (now Vena Energy) to a consortium led by Global Infrastructure Partners.

Fund III investments will be evenly spread across Japan, South Korea, Taiwan, Australia Singapore and a group of countries in south and Southeast Asia, including India, the Philippines, Thailand, and Indonesia, according to the source.

The firm is aiming to generate “very strong returns,” the source said, noting that Equis, to date, has generated returns “above 30 percent across its capital”. The manager’s strategy is to work on the development and construction of assets, instead of buying brownfield or semi-constructed assets.

The firm expects some of its previous investors to commit capital to the new vehicle and has received interest from a wide range of institutional investors, including endowments, foundations and pension funds, as well as large financial institutions, particularly insurers, the source said.

Around 60 percent of Equis’ Fund II, which raised $1.01 billion in 2015, has already been deployed, and will be fully invested after a couple more deals, this person added.

Equis’ strategy is to deploy individual investments of between $200 million to $500 million into sector-specific platforms that develop infrastructure assets, the source told Infrastructure Investor.

In recent weeks, the company announced the appointment of two new partners, Mark Warner and Damian Secen, that joined the company after holding positions in University of Texas’ UTIMCO and Macquarie Infrastructure and Real Assets, respectively.

Equis’ AUM currently stands at $2.67 billion, according to Infrastructure Investor data.