First State has announced that it will kick off its fifth and final round of fundraising in June, targeting a further €300 million to €500 million for its European Diversified Infrastructure Fund (EDIF).
The platform reached €1.3 billion upon its fourth close last September, after six months that saw it collect more than €600 million. The fund now aims to exceed its target size of €1.5 billion with a hard cap of €2 billion.
Launched in 2007, EDIF started its life as an open-ended vehicle but was changed to a hybrid structure in 2009, when First State sought to garner commitments from institutional investors. The vehicle now operates as a closed-ended fund, but limited partners have the possibility to extend their commitments in five-year blocks.
“From closing Series four in September 2013, we have efficiently deployed 70 percent of new capital in just six months. Our investors have been pleased with the pace at which we achieved this and the quality of the underlying investments,” said Philippe Taillardat, a partner within First State’s direct infrastructure team.
Focused on European utility and transport core assets, EDIF has had an active 2013 on the deal front. Last December, the fund bought 100 percent of Ferngas Nordbayern, a 2,100-kilometre gas distribution network in Germany.
A few weeks later, it was one of the two leading members of the consortium that acquired Fortum’s Finnish power distribution business for €2.55 billion – the largest transaction of the year in Europe – along with Canada’s Borealis. The investors’ equity partners in the deal also included two local pensions.
The fund has generated an annualised net total return of 12 percent since inception, including a net cash yield of more than 6 percent. Its final fundraising round is scheduled to close in November.