Exclusive: Equitix set to close on £750m hard-cap

The milestone for Fund IV, which targets a gross IRR of 11%, comes after the manager teamed up with HICL and NPS to buy the concession for the UK’s HS1 rail link.

London-based Equitix’s fourth vehicle is about to reach a final close on its hard-cap of £750 million ($979 million; €846 million), Infrastructure Investor understands.

The vehicle, which hit a first close on £278 million in 2015, has a £500 million target. Several sources said the final milestone could be reached imminently, leaving the fund nearly 50 percent larger than its predecessor, which closed on £505 million in September 2013.

Known investors in Fund IV include the Willis Towers Watson Pension Fund, the London Borough of Croydon Pension Fund, the San Francisco Employees’ Retirement System and the Strathclyde Pension Fund, according to Infrastructure Investor data. The latter two committed £30 million, while the London Borough of Croydon Pension Fund pledged £10 million.

Other LPs include the Derbyshire Pension Scheme, the East Riding Pension Fund, YIELCO Infrastruktur, the Littlewoods Pensions Scheme and the ITV pension scheme, while the vehicle’s GP was appointed in June 2015, according to filings with Companies House.

Equitix declined to comment on the fundraising.

In line with its predecessors, Fund IV targets assets in the social infrastructure, utilities, waste, renewables and accommodation sectors. It has a gross IRR target of 11 percent, according to meeting minutes from the Strathclyde Pension Fund.

The firm’s previous vehicles are currently beating expectations, the document notes, generating gross IRRs of more than 12.5 percent and a short-term cash yield in excess of 10 percent. The Strathclyde Pension Fund states the fund has an expected life of 25 years, with two potential one-year extensions and a five-year investment period.
On its website, Equitix notes that the vehicle is already more than 50 percent committed.

Assets recently backed by the firm include a new 643-bed student homes complex at the University of Essex, which reached a £67.5 million financial close in June. Last week, Equitix agreed to buy the concession for the UK’s HS1 rail link, alongside consortium partners HICL Infrastructure and South Korea’s National Pension Service, in a £914 million deal.

The firm has also been shortlisted for the first three of five offshore transmission owner projects currently being tendered by Ofgem, the UK energy regulator.