The Pipeline: EQT target, Global Offsite, Brookfield’s coal, Athens airport stall, Meridiam hits the road

EQT sets target for Fund V, Brookfield to resume stalled sales process and your chance to sign up for our first global virtual event.

First look

EQT to raise by the dozen

Metlifecare: holding for EQT’s higher offer

EQT’s ‘will-it-won’t-it’ journey in launching its fifth infrastructure fund included the highlight of a proposed bridging fund. However, the Swedish firm has finally settled on launching EQT Infrastructure V, last week confirming it had set a €12.5 billion target for the vehicle. It declined to comment on whether a hard-cap had been set. The vehicle’s predecessor, EQT Infrastructure IV, closed on its €9 billion hard-cap, having set a €7.5 billion target.

Fund IV, however, still has room to invest and this might go towards an asset the group is familiar with. EQT called off its NZ$1.5 billion ($911.5 million; €835.4 million) acquisition of New Zealand retirement village owner Metlifecare in April, citing the impacts of covid-19. Despite this, EQT now wants back in, as per the Australian Financial Review (paywall), albeit at a lower price unacceptable to Metlifecare. So much so, Metlifecare will meet this week to continue litigation efforts already initiated to hold EQT to the original price. EQT declined to comment on the litigation.

Brookfield restarts the fires on coal terminal
Metlifecare is not the only delayed process to potentially come back to market. Brookfield Asset Management’s dual-track sales process for its Dalrymple Bay Coal Terminal in the Australian state of Queensland was one of the first deals to be shelved as the pandemic took hold earlier this year.

We now hear that the Canadian asset manager has begun holding meetings with fund managers again to provide an update on the asset, having last met interested parties in March. The world has obviously changed a lot since then, though a source said the asset has continued to perform well through the economic downturn. Both options – an IPO and a private sale – are still on the table.

Although the process hasn’t swung back into full gear yet, it is a sign that more covid-impacted deals could start to be revived in the near future.

Athens airport sale grounded – for now
It seems covid-19 has caused some turbulence for Greece’s privatisation agency HRADF, which in January announced a shortlist of nine heavyweight bidders that included Ardian, KKR and GIP for a 30 percent stake in Athens’ international hub, Eleftherios Venizelos, bringing the international tender to a halt. The agency didn’t want to make too much of it – it didn’t issue a press release; the only clue was two short statements issued last week, calling off the search for a valuation and a fairness advisor with regard to the sale. The agency declined to provide further details.

It’s unclear when the decision was made, but an effort to hire the two advisors began on 3 March, when HRADF advertised the two positions. At that point, the World Health Organization had yet to declare the coronavirus a pandemic and Greece had not imposed a lockdown. According to a European Commission country report, “the process will resume once the situation improves”.


Sink or swim? Find out at our Global Offsite
They say a rising tide lifts all boats, and the old cliché of what happens when the tide goes out looks set to be as true as ever. Talking to Colin Simpson, head of asset management, infrastructure, at the UK’s LPPI, (his LinkedIn profile here) ahead of the Infrastructure Investor Global Offsite one week hence, he noted: “Covid has laid bare the asset management ability, both at the manager and at the asset itself. The good assets have been able to defend value, have data at hand and [are] able to quantify the extent of any disruption to investors.”

And the inevitable outcome of this? Simpson thinks it will be price increases for quality, defensive assets.

But what about the rest? Join us at our online and essential Global Offsite (growing list of speakers here) from 13-15 July to find out. Simpson will be among the industry’s most influential investors and managers uncovering who is sinking, who is swimming and who is going to be left wondering why they they didn’t put on a swimming costume. Together we will be setting the course for the choppy seas ahead.


“I think it probably will [accelerate] because when the tide recedes you see who’s swimming without their trunks on, and some of the funds have found this process uncomfortable” 

Senator Jane Hume, assistant minister for superannuation in Australia, paints a vivid picture of the situation some superannuation schemes find themselves in as they consider mergers


Meridiam takes the PFI highway

MIM: paving a new road for PFI investors? Photo: Mitchell Orr

They say as one door closes, another one opens, and this was as true as ever for Meridiam last week. About an hour before UK Prime Minister Boris Johnson began a speech that would kill off any hope of reviving the private finance initiative, news landed from the Paris-based group that it had been selected, alongside Spain’s FCC, to upgrade the A465 road in Wales.

The 30-year, £400 million ($494.8 million; €440.4 million) concession is the first project procured under the Welsh government’s mutual investment model, replacing PFI. Is this just PF3? Not so, according to the devolved government, which says it can “exert influence over the chosen private partner to ensure the public interest is protected” through a public interest director on each project. The mutual investment model also removes “soft services” such as cleaning and catering, elements of the PFI model that contributed to its demise in the UK.

LP watch

CalPERS names new head of real assets
The California Public Employees’ Retirement System has tapped Sarah Corr (LinkedIn profile here), who has been with the public pension – the largest in the US – for roughly 20 years, to replace Paul Mouchakkaa (LinkedIn profile here) as head of real assets. The pension found a successor for the position – whose holder oversees both infrastructure and real estate – just three months after Mouchakkaa left to join BentallGreenOak, a Toronto-based real estate investment firm.

Corr, who has been described by contacts as understated, experienced and competent, is stepping into the role after serving as managing investment director for private equity on an interim basis that lasted two years, when Real Desrochers (LinkedIn profile here) departed in April 2017 and wasn’t replaced until last May when Greg Ruiz (LinkedIn profile here) was hired. Corr inherits a $44.4 billion real assets portfolio, with infrastructure accounting for roughly $5 billion of that total.

Today’s letter was prepared by Zak Bentley. Kalliope Gourntis and Daniel Kemp also contributed