Nordic investor to boost infrastructure sector with €8B fund

Scandinavian private equity firm EQT is reportedly planning to raise at least €8 billion for a new infrastructure fund, an amount that would make it the largest vehicle in that sector in Europe. 

The fund would follow the same strategy as its predecessors, according to the Financial Times, focusing on medium-sized infrastructure companies in sectors including energy, transport and logistics, environmental, social and telecom. Typically, EQT invests between €100 million and €600 million in businesses across the Nordic region, continental Europe and North America. 

Fundraising for the new vehicle, which is expected to start in September, would come less than two years after the firm’s third infrastructure fund closed on €4 billion. EQT's investments include B2B data communication services provider GlobalConnect and Delta Comfort, a telecom infrastructure company and supplier of energy. It is expected that firms that backed the third fund, such as BlackRock and Ardian, will also invest in the new one. 

If successful, the fund would go a long way in driving up capital invested in the infrastructure space, which this year is lagging behind the heights reached in 2017. More than halfway through 2018, there have been just 19 transactions in the sector, worth a total of about €6.7 billion. Compare that to last year, when investors completed 94 deals for a total of roughly €32 billion, per the PitchBook Platform. 
 
The infrastructure fund would be EQT's second massive vehicle of 2018. Earlier this year, it closed its eighth buyout vehicle on €10.75 billion—making it the biggest in the firm’s history, the third-largest European buyout fund in history and only the fifth to surpass €10 billion. 

This feeds into the larger trend in the European private equity industry of an increase in mega-funds. Last year,  CVC Capital Partners gathered €15.5 billion for the  largest Europe-based fund in recent history. This year has already seen three €5 billion-plus vehicles: one each from  BC Partners and PAI Partners and the €10.75 billion fund from EQT.
 

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