Crossing the pond

Credit crunch or not, some investors are forging full speed ahead into infrastructure. Barely three months after closing its debut infrastructure fund on €1.2 billion during one of the most turbulent Novembers ever for worldwide equity markets, Swedish private equity firm EQT made its first infrastructure investment – a power plant in Michigan.

The investment is also the first direct investment by any EQT fund in the US. The EQT Infrastructure Fund will buy 65 percent of Midland Cogeneration Venture (MCV), a 1,560 mega-watts gas plant, from Blackstone-owned GSO Capital Partners and Rockland Capital Energy, which bought the plant in August 2006. The remaining 35 percent went to Fortistar, the New Yorkbased clean energy contractor.

The price was not disclosed, but news of the deal made a splash among established North American investors curious to see who was moving in on their turn. They have been keeping an eye on EQT since August 2007 when the firm’s co-founder and managing partner, Conni Jonsson, sent a letter to about 280 investors.

He said EQT intended to capitalise on Scandinavian governments’ growing enthusiasm for public-private partnerships. It didn’t take long for that interest to spill over to the other side of the Atlantic. EQT opened a New York office – its first in North America – in the second quarter of 2008. More deals are sure to follow.