First State eyes €3.5bn with launch of third European fund

The launch of EDIF III comes two months after First State wrapped up a €2.6bn fundraising for its second fund.

First State Investments has launched its third European infrastructure fund, with plans to raise €3.5 billion.

The European Diversified Infrastructure Fund III is set to replicate the strategy of its predecessors, targeting assets in the energy, utility and transport sectors. Gross returns of above 10 percent are targeted for the fund, a spokeswoman for the group told Infrastructure Investor, with a gross cash yield of above 5 percent.

As with its predecessors, EDIF III will raise the funds through a staged series of three to five fundraisings, a process that provides for “focused investment discipline, while delivering rapid deployment of investors’ capital”, First State said in a statement. The first series will target about €1 billion, the spokeswoman added, with a first close expected early next year.

EDIF II was raised across three fundraises, the last of which added €500 million to the vehicle, which held a final close on €2.6 billion in July. EDIF I closed in 2015 on €2 billion.

“The decision to have three, four or five closings will depend entirely on a combination of investor appetite and the speed of deployment of each series,” the spokeswoman explained.

EDIF II is about 70 percent deployed, according to the statement, having invested in assets such as Swedegas, Utilitas and Scandlines.

First State Investments is the European arm of Australia’s Colonial First State Global Asset Management, which this week changed its name to First Sentier Investments, following its acquisition by Mitsubishi UFJ Trust & Banking Corporation from the Commonwealth Bank of Australia, a transaction which closed last month. The name change takes place with immediate effect in Australia and will be rolled out to other jurisdictions next year.