Pension funds comprise the majority of limited partners (LPs) in Swedish private equity firm EQT's second infrastructure fund, which closed recently on €1.9 billion.
Whereas in EQT's first, €1.1 billion infrastructure fund, closed in 2008, pension funds and sovereign wealth funds made up a combined 28 percent of LPs, in Fund II, 64 percent of LPs are pension funds, with sovereign wealth funds accounting for 4 percent of all LPs.
In an exclusive interview with Infrastructure Investor, Lennart Blecher, EQT's head of infrastructure, said EQT Infrastructure II benefitted from 2011's fundraising of EQT VI, the firm's latest buyout fund:
“When EQT VI was raised, we had a very strong commitment from many of the world’s sovereign wealth funds and several institutional investors around the world. When we then continued with the EQT Infrastructure II fundraising, many of those investors already knew what EQT stood for and decided to come onboard. They had learned about EQT’s governance and industrial model through EQT VI,” Blecher explains.
“We also had a very high re-up rate, with some 60 percent or 70 percent of the investors from EQT’s first infrastructure fund investing in Fund II,” he adds.
The LPs in EQT Infrastructure II are also coming from different parts of the globe.
Whereas LPs from Nordic Europe still comprise the majority of Fund II's LPs (35 percent), their presence has decreased sharply in relation to Fund I (61 percent). North American LPs are now Fund II's second-largest group of investors (24 percent), whereas in Fund I they accounted for a mere 2 percent of LPs.
*To find out more about the fundraising for EQT Infrastructure II, be sure to read our exclusive interview with head of infrastructure Lennart Blecher, published in the March issue of Infrastructure Investor magazine.