The Pipeline: EQT’s €20bn target, Golding’s double-fund close, CIP loses top Rainmaker

EQT VI targets €20 billion; Golding secures double infra fund close; and CIP loses top Rainmaker. Welcome to The Pipeline, the start-the-week briefing for our valued subscribers only.

First look

Lighting up the market: Stockholm-based EQT to raise its largest ever infra fund

EQT VI crosses into ‘gigafund’ territoryGood things come to those who wait, or so the adage goes. Yet, almost 10 months exactly after the €15.7 billion closing of EQT Infrastructure V, the Swedish group has revealed a €20 billion target for EQT Infrastructure VI.

Given EQT Infrastructure V set out with a €12.5 billion target, the firm warned in a statement that the final size of the successor vehicle could well be higher – or lower – than the target size. Why back so quick? It’s that thriving deal market, of course.

“To ensure continuity between two fund generations, EQT’s capital raisings usually follow a cycle, with successor funds targeted to be in a position to commence investment activities when the predecessor fund is close to being fully invested,” it said in a statement, with the remaining money from Fund V to be used for add-on acquisitions or expenses.

With 2022 the year of the mega-fund, is 2023 set to be the year of the ‘gigafund’?

LPs strike gold with GoldingCan’t decide between the plethora of infrastructure funds out there? Some investors have found solace with Golding Capital Partners, which has just raised €943 million for Golding Infrastructure 2020, the fourth vintage of its infrastructure fund of funds series.

The vehicle, which cruised past its €700 million target, has made eight investments to date, including repeat commitments with North Haven Infrastructure PartnersVauban Infrastructure Partners and InfraVia Capital Partners, a spokeswoman told The Pipeline. New commitments were made to Tiger Infrastructure PartnersNextEnergy Capital and Q-Energy.

Golding is toasting a double fundraising success as it also closed its Golding Infrastructure Co-Investment 2020 fund on €578 million, above its €450 million target. The vehicle has made nine investments so far in utilities, telecoms, transportation and social infrastructure, according to the spokeswoman.

LPs won’t have to wait for long to jump on the next vintage. According to Golding, a successor fund of funds is set to launch this month, while the next co-investment vehicle will be out in spring 2023. Still hungry? An energy transition fund of funds is also in the works, it stated.

A hot market, indeed.

CIP closes €3bn ET fund as top Rainmaker departsCopenhagen Infrastructure Partners has hit its €3 billion hard-cap for its CI Energy Transition Fund I, which the firm is calling “the largest dedicated clean hydrogen fund globally”.

The oversubscribed close attracted commitments from 65 institutional investors – split roughly 50/50 between existing and new LPs – with commitments coming from the Nordics (25 percent), the rest of Europe (45 percent), Asia-Pacific (20 percent) and North America (10 percent).

The debut energy transition fund will primarily target industrial scale Power-to-X projects – that is, projects that convert surplus electric power into other energy sources – to help decarbonise industries such as agriculture, aviation, shipping, chemical manufacturing and steel production. It will mostly focus on greenfield projects in Western Europe, North America, Australia and developed Asian countries, targeting a net IRR of more than 14 percent.

Alas, CI ETF I’s close was swiftly followed by news that Steen Lønberg Jørgensen, CIP’s head of investor relations and fundraising, has left the firm after seven years. Jørgensen – one of infrastructure’s top fundraisers, as per our recently published Rainmaker 20 list – helped raise more than €15 billion for CIP. He leaves to join real estate outfit Heimstaden, as head of capital raising and client relations.

Talk about quitting while you’re ahead…

DTCP in €1bn second close for Fund II – updatedDigital Transformation Capital Partners, or DTCP, held a second close on its Digital Infrastructure Vehicle II last week, garnering €1 billion from a set of investors including BlackRock and abrdn, as well as “a sovereign wealth fund from the Middle East and various German insurance companies”, according to a statement.

Since its launch in June 2021, the fund has committed €730 million in capital towards four transactions: Cellnex, a Dutch company formed through the merger of Deutsche Telekom’s and Cellnex’s tower businesses; Open Dutch Fiber and E-Fiber, the Netherlands’ two largest independent open access fibre-to-the-home networks; and an unnamed European data centre business.

Ticket sizes range from €150 million to €250 million and DTCP expects a final close in 2023.

*An earlier version of this item incorrectly stated that DTCP was owned by Deutsche Telekom, when it is, in fact, an independent manager. We apologise for the mistake.

Swiss Life’s second renewables dipSwiss Life Asset Managers has launched its second international renewable energy fund, known as Fontavis ESG Renewable Infrastructure Fund II.

The vehicle is targeting €750 million and will continue the strategy of its predecessor, namely investments across OECD countries in wind, solar, hydro and biomass energy generation, as well as storage and renewable fuels.

Swiss Life AM is targeting a first close in Q4 for the Article 8 fund, under the EU’s Sustainable Finance Disclosure Regulation.

“We want to apply our deep know-how of the energy sector and invest in all fields of the energy transition […] to make electricity generation, heat supply and mobility more sustainable”, Marc Schürch, head of renewable energy at Swiss Life AM, said in a statement.

Essentials

Rainmaker 20: Meet infra’s ace fundraisers“If you were in the process of raising a fund, who would you want on your team and why?”

That is the question we asked a broad swath of the industry a few months ago. Last week, we published the results of our research: the second edition of Infrastructure Investor‘s Rainmaker 20 list. And what better time to publish it than the year that infrastructure fundraising is expected to reach an all-time high, with an impressive $112.7 billion already raised at the end of H1, equivalent to 75 percent of 2021’s full-year total?

We have 16 new nominees on our list and four returning names from the first edition of Rainmaker 20. So, if you haven’t yet taken the time, click here to find out who are the people driving the asset class’s record fundraising run.

Grapevine

“We’re putting in more nuclear and you’ll be hearing more about that… and we’re putting in absolutely shedloads of wind power as well”

Outgoing British Prime Minister Boris Johnson promotes his net-zero legacy with an unforgettable description

Who’s hiring

Zapparov to fill the blended finance gapThe newly launched sustainable infrastructure debt financing firm Pentagreen Capital, co-founded by Singapore-based Temasek Holdings and HSBC, has appointed Marat Zapparov as its chief executive.

Zapparov joins the Asia-focused platform from the International Finance Corporation, where he headed up Asia project development and investment. He was previously senior director of infrastructure at financial solutions provider Clifford Capital, in Singapore.

Established with a joint $150 million commitment from HSBC and Temasek, Pentagreen intends to make $1 billion of loans over the next five years. The firm – which is looking to deploy “blended finance at scale over time”, according to a statement from the founding partners – will focus on the renewables, transport, waste and water management sectors.

In a statement commenting on his appointment, Zapparov said the new platform would “fill the gap between traditional financing options from banks and development financiers” and speed up the development of sustainable infrastructure in the region.

LP watch

Increased infra allocation softens macro blowAustralian sovereign investor Future Fund has clocked a -1.2 percent return for the 2022 financial year. Disappointing? Sure, but it could have been a lot worse for the A$242 billion ($164.3 billion, €164.9 billion) fund had it not been for a sizeable reallocation in favour of infrastructure, CEO Raphael Arndt told a media briefing last week.

Commenting on the result within the context of “a very challenging” macro environment, Arndt said the fund’s decision during the year to cut its allocation to publicly-traded equities by 7 percentage points and redirect that capital towards “the stronger performers for the year” – infrastructure and macro hedge funds, which delivered returns of more than 20 percent – had prevented the fund’s total return taking a more substantial dive.

Combined with timberland, infrastructure now accounts for 9.5 percent of the fund’s total portfolio, up from 7.4 percent the previous year.

Looks like Future Fund is future-proofing.

Deals

HITting the road: KKR invests in third Indian infra trust

KKR’s latest Indian HIT
With India now firmly in the sights of many investors as a market of huge potential, KKR has announced its latest deal in the country: the launch of an infrastructure investment trust (InvIT) focused on roads.

It is KKR’s third InvIT in India, following the country’s first renewable energy InvIT, Virescent Renewable Energy Trust, and India Grid Trust, an energy transmission InvIT.

The roads portfolio comprises six assets spanning more than 450km across six states in India – Gujarat, Madhya Pradesh, Meghalaya, Rajasthan, Tamil Nadu and Telangana – with further acquisitions in the pipeline.

KKR’s trio of InvITs together operate and manage 33 assets valued at more than $3.8 billion across 22 Indian states or territories, with its latest Highways Infrastructure Trust described by KKR partner Hardik Shah as “a significant milestone” in the build-out of the firm’s India infrastructure strategy.

It’s a HIT, then.


Today’s letter was prepared by Zak Bentley. Bruno AlvesDaniel KempTharshini Ashokan and Isabel O’Brien also contributed