Fundraising

Exclusive: First State to seek extension to EDIF II €900m hard-cap

The firm is looking to close its second series of fundraising on €1.2bn early next year.

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First State is set to request permission from investors in its European Diversified Infrastructure Fund II to go beyond its €900 million hard-cap, Infrastructure Investor understands.

The fund has reached a second close by hitting the hard-cap figure and is now believed to be approaching investors from the €700 million Series I to extend the fund to €1.1 billion, ahead of a close early next year, a source told Infrastructure Investor. A second source said this is likely to go to €1.2 billion.

One UK-based pension scheme has already confirmed its intention to increase its allocation to EDIF II. The Worcestershire County Council Pension Fund has committed a further £25 million ($33.4 million; €28.2 million) to First State, on top of the £75 million it invested in the vehicle in June. The pension fund’s £75 million investment in Stonepeak also confirmed in June has received the same boost.

EDIF II is pursuing a similar fundraising strategy to that of its €2 billion predecessor, which raised capital over several “series”. The fund secured €700 million from the first series in April and is aiming to garner between €2 billion and €2.5 billion over three series.

The vehicle is seeking to generate a gross IRR of between 8 percent and 15 percent, according to a report earlier this year by Deloitte for the Hammersmith and Fulham Pension Fund. It has an initial term of 15 years with an option to extend in five-year increments and a fee structure of 1.15 percent on commitments below €50 million and 1.05 percent on those below €100 million.

First State confirmed upon the closing of the first series in April that a third of the €700 million then raised had been deployed into French district heating firm Coriance and its Portuguese wind portfolio company Finerge.

Philippe Taillardat, the group’s co-head of infrastructure investments in Europe, left First State in September, shortly before fundraising for the second series was due to commence. It is understood his departure has had no significant impact on the fundraising process.

First State declined to comment.