Equitix closes third fund on £500m hard cap

The London-based firm, which targets UK PFI deals, took just six months to hit its maximum target.

Equitix, the UK fund manager, has announced a final close of its third fund on its hard cap of £500 million (€599 million; $812 million). The firm had posted a first close three months ago on £350 million and the entire process since launch took six months.

Moreover, the fundraising was oversubscribed by more than £100 million, meaning it could have raised in excess of £600 million.

Sources close to the fundraising said some limited partners (LPs) had insisted the original hard cap be maintained this time. In the firm’s previous fundraising for Fund II, it hit a revised hard cap of £350 million, having originally set a £250 million hard cap.

Although Equitix still has strong support among its traditional UK investor base, Fund III saw increasing international support from investors in Asia (including Thailand) and mainland Europe (especially Germany).

Richard Anthony, senior managing director of Evercore Private Funds Group – which acted as global placement agent to Equitix III – described the investor base as “more globally diverse”.

It is understood that Asian investors – and others making their first forays into infrastructure – like the UK market because it fits with their conservative approach. The UK is one of the world’s longest established public-private partnership (PPP) markets and is seen to benefit from government support even though the Private Finance Initiative (PFI) scheme has been remodelled.

Sources say Equitix has benefitted from its ability to deploy capital quickly – Fund II was fully invested in less than 18 months – and from the fact that its investment remit reaches across both the primary and secondary markets.

Equitix targets UK assets involving concession lengths of between 20 and 25 years. It has already earmarked approximately £150 million of Fund III for assets where it has preferred bidder/exclusive status, including the North Tyne Extracare housing project.

Equitix is also the manager of a UK energy efficiency fund, which had £50 million at first close and has made three investments to date. The UK’s Green Investment Bank is the fund’s cornerstone investor.

Ashurst provided legal advice to Fund III, while Deloitte was tax adviser.