EQT Group, a global private equity firm, today announced that it has held its first closing for the EQT Infrastructure V fund, reaching €12.5bn, and achieving its target fund size. Moreover, based on strong demand from both new and existing investors, the firm expects EQT Infrastructure V will grow beyond its target fund size and reach its hard cap of €15.0bn. Indeed, by reaching the €15.0bn hard cap, EQT Infrastructure V will be amongst the five largest infrastructure fundraisings in history. The firm expects to conclude the fundraising process in the first-half of 2021.
EQT Infrastructure Fund – Overview
EQT Infrastructure V is a value-add infrastructure fund, investing in the sub-sectors of energy, transport & logistics, environmental, telecom (i.e., digital infrastructure), and social. Specifically, the fund targets equity investments ranging in size from €200m to €800m per deal, in North America, Europe, and Asia-Pacific.
Historically, prior EQT Infrastructure fund vintages have made investments in numerous digital infrastructure companies. For example, EQT Infrastructure is an investor in EdgeConneX (Data Centers), Zayo Group (Fiber), and Deutsche Glasfaser (Fiber).
History – EQT Infrastructure Fund
Prior to EQT Infrastructure V, EQT Group launched four infrastructure equity funds, namely EQT Infrastructure I through IV. Indeed, all of EQT’s prior infrastructure funds have been ranked in the top quartile, amongst its peers, based on performance. Overall, EQT Infrastructure targets return levels of a 1.7x to 2.2x gross multiple of invested capital (MOIC) through its infrastructure funds.
To summarize, below are key figures from prior funds EQT Infrastructure I through IV:
EQT Infrastructure I (2008)
- Committed Capital: €1.2bn
- Gross Multiple of Invested Capital (MOIC): 2.5x
- Net Internal Rate of Return (IRR): 17%
EQT Infrastructure II (October 2012)
- Committed Capital: €1.9bn
- Gross Multiple of Invested Capital (MOIC): 2.0x
- Net Internal Rate of Return (IRR): 20%
EQT Infrastructure III (November 2016)
- Committed Capital: €4.0bn
- Gross Multiple of Invested Capital (MOIC): 1.7x (as of December 31, 2020)
EQT Infrastructure IV (November 2018)
- Committed Capital: €9.1bn
- Gross Multiple of Invested Capital (MOIC): 1.1x (as of December 31, 2020)
With EQT Infrastructure V reaching €15.0bn of committed capital, the fund is 65% larger than the firm’s largest fund historically.
Fee Structure and Limited Partners (LPs) – EQT Infrastructure Funds
EQT Infrastructure’s clients are Limited Partners (LPs), which make commitments to its various infrastructure funds. These LPs include institutions such as the Alaska Permanent Fund, Maine Public Employee Retirement System (MPERS), Oregon State Treasury, and Teacher Retirement System of Texas.
Overall, EQT Infrastructure’s funds have charged these LPs management fees of 1.5%, and performance fees (carried interest) of 20%, over a 6% hurdle rate.
Competitors – EQT Infrastructure Fund
EQT Infrastructure’s closest competitors include Antin Infrastructure Partners, Brookfield Infrastructure Partners, Digital Colony Partners (Colony Capital), Global Infrastructure Partners, KKR Infrastructure, Macquarie Infrastructure and Real Assets (MIRA), and Stonepeak Infrastructure Partners.