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Equitix to keep raising money after £235m close

Fund II has already locked down an extra £15m in commitments, securing its original £250m hard-cap. But LPs have allowed Equitix to try and raise up to £350m during the first quarter of 2012. Close to 60% of the funds raised have already been committed to UK PFI projects.

UK fund manager Equitix is capitalising on a strong fundraising momentum, expanding the hard-cap for its second infrastructure fund to £350 million (€424 million; $541 million) after securing commitments of £250 million – its original hard-cap.

Fund II – which mostly targets UK Private Finance Initiative (PFI) projects – has just held a close on £235 million and has secured a further £15 million from investors, which is due to be committed by the end of this month.

However, the fund’s limited partners – mostly UK corporate or local authority pension funds – have allowed Equitix to set a new hard-cap of £350 million, in response to a “strong pipeline of investment opportunities”, allowing new investors to join Fund II throughout the first quarter of 2012. 

This is not the first time Equitix has increased its fund target in response to strong demand. After having “comfortably exceeded” its original target of £150 million last September, the fund manager decided to seek an extra £100 million, which it has now secured. About 60 percent of the funds raised have already been committed to primary or secondary UK PFI projects.

One year ago, Richard Anthony, chief executive of Evercore Private Funds Group, which is acting as sole global placement agent on Equitix’s second infrastructure vehicle, outlined what he thought were some of the fund’s competitive advantages:

“A lot of other funds tie management fees to inflation but Equitix is charging a flat 1.25 percent management fee not linked to inflation. In addition, carry is charged against yield, as opposed to rate of return, with a hurdle rate of 7.5 percent. Equitix also capped carry at 20 percent, so even though PFI projects, toward the end of their lifecycles, tend to produce very high yields, carried interest stops once the yield gets to 20 percent.”