EQT inches closer to €20bn target for Fund VI
EQT has added roughly another €1 billion to its capital haul for EQT Infrastructure VI, bringing the total raised to date to €17 billion. The Stockholm-based asset manager expects to reach final close on its €20 billion target in Q1 2025, EQT’s head of business development, Gustav Segerberg, said during the firm’s Q3 earnings call last week.
With the fund nearly 50 percent invested, its successor will most likely launch in mid-2026, Segerberg said. It will be part of the next fundraising cycle during which EQT expects to raise a total of €100 billion across asset classes, according to CEO Christian Sinding.
EQT is also in the process of developing five evergreen funds, two of which will be infrastructure focused. One will be marketed in Europe and Asia, the second will be marketed in the US, Segerberg said, without providing further details.
Fundraising aside, exits are a top priority, Sinding said, citing an improved market outlook. The 20 exits EQT realised this year include the sale of a majority stake in fibre-to-the-home provider Fiberklaar; and the sale of a 25 percent stake in US waste management company Reworld to GIC.
Data centres drive Blacktone infra’s top performance
Blackstone Infrastructure Partners saw 16 percent net returns annually since inception while its total AUM has grown to $53 billion, a 32 percent increase year-on-year, Blackstone revealed in its recent Q3 earnings call.
Jon Gray, Blackstone president and COO, credited data centres as “the biggest driver” behind the infrastructure unit’s 16 percent net return, with chairman, CEO and co-founder Stephen Schwarzman telling listeners that “today, Blackstone is the largest data centre provider in the world, with holdings across the US, Europe, India and Japan”.
Blackstone committed over $50 billion for a second consecutive quarter. “Our largest commitment in the quarter was AirTrunk across multiple Blackstone funds,” Gray revealed, referring to the $16 billion deal for the Australia-based builder and operator of data centres across Asia-Pacific.
Appreciation for BIP, the firm’s flagship open-end infrastructure fund, stood at 5.5 percent in the past quarter, with 18 percent gross returns for the last 12 months – the best performance amongst all of its strategies.
Total inflows for the quarter came to $2.8 billion, counting the €1 billion raised for its new open-end BIP Europe fund, which Gray called “a very promising development”.
Solar: a 15-year plan for a 35-year asset
There’s only a lucky few today who are still signing 15-year power purchase agreements for solar assets, but even among those, worry remains about the future. That’s according to Frank Sherman, senior director of M&A at the US subsidiary of Japanese group JERA.
“If you take a solar asset, which is a 35-year asset, and you have a 15-year PPA, you’re naturally taking speculation on what prices are from year 16 through to 35,” Sherman told the Infocast Clean Energy Investment Summit, held in Houston this month.
“Most of your IRR is going to be driven in those 15 years. I think it’s becoming harder and harder to take a realistic, discipline valuation,” he outlined, adding that there are some market participants in the US renewables space that perhaps aren’t as conservative as JERA Americas on such valuations.
Is the wild west back in America? If so, you heard it first in Texas.
Prime Capital’s second Green Energy fund in €313m third close
Frankfurt-based Prime Capital, a large investor in Scandinavian onshore wind with €4.3 billion in AUM, has reached a third close for its Prime Green Energy Infrastructure Fund II (PGEIF II) on €313 million. The SFDR Article 9 fund’s target is €700 million, and more than half of the current commitments are from new investors, including €100 million from the European Investment Fund.
PGEIF II targets investments in renewable energy projects across Europe, with a focus on Scandinavia, and has an onshore wind-heavy pipeline of over €600 million in assets. The fund’s net IRR target is 10-12 percent, with an expected money multiple of around 2x over 10 years, and full deployment expected in two years.
Its predecessor fund was launched in 2020, closed oversubscribed on €586 million in December 2021 and has 1.3GW of generation capacity under construction or in operation. As of 30 June, the fund’s IRR was 11.14 percent with 91.1 percent called, according to Infrastructure Investor’s fund performance data.
Grapevine
“A Chinese sewage pipe exploded next to a busy road, covering passersby in human waste, an incident described by Thames Water as pretty amateur”
Amol Rajan, host of BBC comedy show Have I Got News for You, demonstrates Thames Water is never far from the media spotlight.
Who’s hiring
The Chase for capital returns
Industry veteran Brian Chase is back in post following his departure from Quinbrook Infrastructure Partners in April, as he arrives at EnCap Investments.
Chase has joined the Texas-based manager as a managing director on the investor relations and fundraising team for its energy transition strategy. They could use his help, with the group closing its EnCap Energy Transition Fund II in May on $1.5 billion, falling short of its $2 billion target.
That being said, the net IRR of EnCap’s 2019-vitnage first transition fund was at 26 percent in October 2023, according to the Arkansas Teacher Retirement System. The fund closed on $1.2 billion in April 2021.
That should make Chase’s task a little easier when it comes to the next vintage, then.
Power Sustainable hires ex-US Ambassador to Canada
Former US Ambassador to Canada Bruce Heyman is now the CEO of Power Sustainable, the Montreal-based sustainable asset manager.
From 2014-17, Heyman represented the US in Ottawa, although prior to his diplomatic career, he spent 33 years at Goldman Sachs.
Power Sustainable has total AUM of C$2 billion ($1.5 billion; €1.3 billion). Last year, it made key hires from I Squared Capital and Legal & General Investment Management to build out a new infrastructure credit platform. It also has a renewables equity fund business.
“It’s not a brand that needs fixing or changing,” Heyman told The Pipeline, noting that he appreciates the talented team already in place that will help him fulfil what he views as Power Sustainable’s mission as the private sector portion of a climate change triumvirate.
“In terms of sustainability, I look at it as a three-legged stool. We have government, we have philanthropy and we have corporate involvement,” Heyman said. “We’re not going to be able to tackle the challenge that we face without being effective and competitive from a commerce and business perspective.”
Let’s hope that three-legged stool is a sturdy one.
Deals
AustralianSuper leads $2bn DataBank equity raise
DataBank has raised $2 billion in an “oversubscribed” equity raise from a group of investors including AustralianSuper, which committed $1.5 billion for a “significant” minority stake, the company said.
The fresh capital will help DataBank expand its data centre operations in the US and “capitalise on the unprecedented demand for cloud and AI infrastructure”, said Derek Chu, head of American real assets at AustralianSuper.
It’s the superannuation fund’s first foray into US-based data centres, via its global real assets portfolio. “DataBank will grow and further diversify our global digital infrastructure exposure, a sector we believe will help deliver sustainable, long-term performance,” Chu added.
Between several debt and equity rounds, DataBank has raised over $4 billion over the past year. Prior investors include DigitalBridge, Swiss Life, EDF Invest, Nuveen, Northleaf Capital Partners, the Investment Management Corporation of Ontario, CBRE Caledon Capital Management and Ardian.