Fast investment pace has EQT looking to expand Fund IV

The fund is about 75% invested after an acquisition from KKR this week, but the firm is now working to ‘ensure sufficient capital is available' to keep investing.

EQT is exploring options to expand its €9 billion EQT Infrastructure IV, the firm revealed this week.

The Swedish manager is considering a range of options at this stage, it said in a statement announcing the release of its first annual report since going public last year.

“Given the pace of investments in EQT Infrastructure IV, work has been initiated to ensure that sufficient capital is available for EQT Infrastructure IV to continue to make investments, either by bridging or extending the existing fund or by using the secondary market,” the statement said.

EQT Infrastructure IV, which closed in March 2019, made its seventh investment this week, teaming up with Canadian pension OMERS to acquire German fibre broadband group Deutsche Glasfaser from KKR, meaning the fund is about 75 percent invested.

The firm declined to comment beyond the statement regarding the size of the extra potential capital or why it won’t be launching a new fund.

However, last month EQT revealed it would be targeting €14.75 billion for its ninth private equity fund. A source told Infrastructure Investor that the manager is unlikely to want to have two significant funds in market concurrently.

In January 2019, another source told us EQT had to significantly scale back demand for the fourth fund, which was said to be reaching €20 billion. It is believed the decision not to close above the €9 billion hard-cap was in order to maintain a more appropriate size given that EQT Infrastructure III had closed on €4 billion.

Ticket sizes for EQT Infrastructure IV typically range from between €100 million and €600 million, a source has previously said. In addition to Deutsche Glasfaser, EQT’s fourth fund has invested in Inexio, another German fibre company, as well as in Parques Reunidos in Spain, a global owner and operator of theme parks. It has also agreed but not yet completed the buyout of US-based communications provider Zayo Group in a joint deal with Digital Colony worth $14.3 billion.