Equitix eyes £1bn for sixth fund following close of fifth

The UK-focused fund will have a hard-cap of £1.5bn, with a similar 7-10% IRR target as its predecessor.

UK-based manager Equitix has launched its sixth infrastructure fund following the close of its fifth earlier this summer on £998 million ($1.2 billion; €1.1 billion).

The next fund will target £1 billion, with a hard-cap of £1.5 billion. It will pursue broadly the same strategy as Equitix Fund V, which aimed for at least 90 percent of investments in the UK core infrastructure sector with a targeted return of 7-10 percent and has a 25-year lifespan.

The launch of Equitix Fund VI mirrors the manager’s previous moves in launching a successor funds soon after the previous one closes. A spokeswoman explained to Infrastructure Investor that it deploys as it receives commitments and the 2017-vintage Fund V is now over 80 percent invested.

Equitix Fund V’s investments include the acquisition of the John Laing Infrastructure Fund alongside Dalmore Capital, for which the pair paid £1.45 billion for control of 65 PPP and PFI projects. In July, Equitix teamed up with Japan’s Kansai Electric Power to buy 50 percent of electricity transmission operator Electricity North West from JPMorgan and First State.

The fund’s close came shortly before the deal at the beginning of July, just shy of its £1 billion hard-cap and above its £750 million target. Some 58 percent of the fund’s investors were based in the UK with a re-up rate of between 50 and 60 percent, the spokeswoman said.

UK investors included Strathclyde Pension Fund, Hampshire County Pension Fund and the London Borough of Croydon Pension Fund, according to Companies House. The spokeswoman added other investors originated from Europe, the US and the Middle East, Companies House shows Saudi Arabia’s Public Investment Fund is an investor.

With currency concerns preventing some European investors from entering Fund V, Equitix also set up its first vehicle dedicated to Europe to not invest in the UK. Equitix European Fund I is set for a €600 million close on its hard-cap in September, she said, and has invested in transport, energy and social infrastructure projects in countries including Spain, Italy and Finland.

For a list of infrastructure funds closed in 2019 year to date, click here