Exclusive: InfraVia raises €1bn for Fund III

Commitments from its first Asian and Middle Eastern LPs helped propel the French firm past its original €900m hard-cap.

InfraVia has reached a final close on its latest vehicle, blasting through its initial €750 million target to collect €1 billion.

Vincent Levita, co-founder, chief executive and chief investment officer of the Paris-based firm, told Infrastructure Investor that the team had decided to revise its original €900 million hard-cap to help accommodate investors from new markets.

Among them are a number of Asian and Middle Eastern institutions, which, along with North American LPs, make up 15 percent of the fund. French investors contributed 45 percent, a marked reduction compared to Fund II’s LP base. Non-French institutions accounted for the remainder.

Investors that pledged to Fund III are also more varied in nature. While insurers and pension funds respectively represented about 40 percent and 30 percent of the capital committed, funds of funds and sovereign investors provided just under a third of the vehicle’s total equity, Levita said. Existing investors provided more than half of the capital collected.

Fund III is consequently much larger than its two predecessors, which respectively closed on €200 million and €530 million in 2009 and 2014.

When asked how InfraVia addressed LP concerns that the vehicle’s increased size meant more dry powder to deploy in a competitive market, Levita observed that funds that used to be around the €1 billion mark have moved on to the €2-3 billion bracket, which has opened up a new space for mid-market players.

Prior to reaching the final milestone, InfraVia held three interim closes on Fund III. The first one, on €500 million last December, was followed by a €750 million second close in March and a €900 million third close over the summer.

The vehicle has already invested in one asset: Next Generation Data, a Welsh-based data centre that the French firm bills as Europe’s largest. InfraVia backed the company in July in a deal that sources valued then at about £100 million ($130 million; €115 million).

The vehicle’s next deal, to be announced shortly, will see the firm buy oil storage assets in Holland and Italy with a view to building a bigger portfolio through follow-on acquisitions. The fund aims to make equity investments of between €50 million and €150 million, typically targeting assets with an enterprise value of up to €300 million. Levita expects it to be fully deployed within three to five years.

The fund targets net returns of about 10-12 percent, comprising a 5-6 percent yield component. It has a 10-year tenure with a potential two-year extension. Levita describes its strategy as “value-add”, focused on sectors including telecoms, energy and utilities, as well as transport. It may also target renewables, seeking to build a portfolio comprising both existing and greenfield assets.