The Pipeline: KKR’s Asia fundraise, Equitix’s fundraising spree, Blackstone and GIP eye big freight deal

KKR’s Asian fund exceeds target, Equitix in fundraising spree and GIP and Blackstone mull ride on Kansas rail.

First look

KKR wants to be big in Asia

IndiGrid: KKR’s first deal in Asia targeted Indian electricity transmission assets

It will take more than a global pandemic to hold off KKR’s Asian expansion after the firm revealed last week that it had raised $2.5 billion for its KKR Asia Pacific Infrastructure Investors fund, which had been targeting about $2 billion. The vehicle was launched last year after moves were made in 2018 to prepare the Asian infrastructure drive, with the hiring of David Luboff from Macquarie to lead the effort.

The fund remains open and will represent one of the region’s largest dedicated war chests. KKR certainly sees more avenues for fundraising generally, with Scott Nuttall, co-president and co-chief operating officer, saying the firm has been seeing strong interest from retail investors – notably high net worth individuals –  with a keen interest in real assets and “infrastructure in particular”.

They’ll be happy to know the overall infrastructure strategy has returned a healthy 30 percent in the last 12 months, KKR said, with the sale of fibre broadband business Deutsche Glasfaser to EQT earlier this year “a big driver” of this growth.

Qualitas in quality renewables first close
Madrid-based private equity firm Qualitas Equity has held a first close on €420 million for its fourth renewable energy-focused offering, after just over 10 weeks in the market, sister title Private Equity International has learned. Q-Energy IV is already almost as big as its €440 million predecessor. The capital raise – a virtual-reality affair amid the pandemic – has attracted interest from European family offices, a Canadian pension and a US insurer. The firm expects an $800 million final close by the first quarter of 2021. If it reaches it, Q-Energy IV would be just €57 million shy of Europe’s largest ever renewables fund, raised by Mirova last year.

Equitix: One fund down, two to go
Investor relations professionals will tell of the difficulties in raising multiple funds at the same time, so there will be satisfaction aplenty at Equitix. According to majority shareholder Tetragon Financial Group, the London-based fund manager closed its maiden Europe-focused effort on €580 million before the end of H1. The fund was set up last year to cater to Equitix’s European investors, which had currency concerns with regard to the firm’s UK-focused and sterling-denominated strategy.

That hasn’t stopped Equitix from raising about £500 million ($649.2 million; €549.1 million) for its sixth UK-focused vehicle, which is targeting £1 billion and expects to raise significantly more by the end of Q3, said Tetragon. What’s more, a slightly left-field third strategy is also in the mix, with Equitix holding a $400 million first close on its Rakiza fund, a vehicle focused on Omani infrastructure and run in conjunction with Oman Infrastructure Investment Management.

Crisis, you said?


“If you’re in big public auctions for wind, there’s a wall of cash coming at it. So, returns on energy alternatives are obviously something that people are quite worried about. We’re not. We think we can do things differently”

BP’s chief financial officer, Murray Auchincloss, sets out his stall as the oil giant aims to build 50GW of renewables by 2030

Who’s hiring promoting?

It takes two
African Infrastructure Investment Managers, a subsidiary of Old Mutual Alternative Investments, has tapped two long-serving executives to succeed Jurie Swart, who is stepping down as chief executive after six years in the role and after 20 years with the firm. The South Africa-based outfit has promoted Vuyo Ntoi and Sola Lawson as joint managing directors.

Ntoi, who joined AIIM in 2003, will continue to be based in Cape Town, while Lawson will remain in Lagos.

AIIM told us that splitting the role in two allowed for the separate allocation of the chief executive responsibilities for each of the firm’s two mandates – the open-end, South Africa-focused IDEAS Managed Fund and the pan-African AIIF vehicles – while letting the duo retain their investment roles.

LP watch

Superfunds’ urge to merge
Fresh from completing its merger with VicSuper at the end of June, First State Super has further cemented its place as Australia’s second-largest superannuation fund by confirming that its merger with WASuper will now also proceed.

The agreement will see the First State-VicSuper combined entity – which has A$125 billion ($90 billion; €76 billion) in assets under management and will rebrand as Aware Super in mid-September – add WASuper’s A$4 billion to its AUM. The merger is expected to complete by the end of November.

It continues the trend for consolidation in Australia’s superfunds sector, driven by pressure from the regulator and a recognition by fund trustees that increasing scale is one way to secure better returns for members.


All aboard the Kansas City Southern

Next stop: Blackstone and GIP seek partners for $16bn rail deal

Blackstone and Global Infrastructure Partners are up to something big.

According to The Wall Street Journal, and confirmed to us by one of our sources, the two industry-leading firms are in talks to make a play for freight rail company Kansas City Southern, which is publicly listed and valued at around $21 billion. Our source told us that, unsurprisingly, “a tonne of equity” would be required to pull off any transaction, which is still viewed very much as a possibility, not a certainty.

What is certain is that talks are underway. There is an open search to bring in additional strategic investors, and around $16 billion of cash would be needed to pull the deal off. If it goes through, and receives approval from Kansas City Southern shareholders and federal regulators, contracts are likely to be signed before the end of this year.

Our source told us any investment in freight rail right now was a “pretty good bet on the core functioning of the economy”.

Looks like ADNOC might face competition for largest deal of the year.

Is EV charging infra? SDCL is sold
Electric vehicle charging infrastructure has long been seen as a promising – if hard to tap into – investment sector. Well, SDCL Energy Efficiency Income Trust, the UK’s first listed trust to target energy efficiency investments, has cracked it.

Last week, it announced it was plugging up to £50 million to acquire an initial 112 ultra-fast EV charging stations across the UK through a partnership with the Electric Vehicle Network. The latter will initially develop and fund the charging stations. When they are contracted and construction-ready, SEEIT will acquire them. After the six- to 12-week construction period, the EV charging sites will be contracted through 20-year, fixed-price, inflation-adjusted energy service agreements to charge point operators. The latter will typically be investment-grade utilities, which will generate “availability-based revenues”, SDCL explained.

The fund has a right of first negotiation on the circa 380 charging sites that EVN plans to develop over the next 36 months, which will require an additional £150 million investment.

Today’s letter was prepared by Zak Bentley. Bruno Alves, Kalliope Gourntis, Daniel Kemp, Ji Hyun Kim and Jordan Stutts also contributed

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