EQT Infrastructure III attracts interest from pension funds

EQT Partners (EQT) has announced that its fund EQT Infrastructure III has attracted interest from several pension funds.

EQT is seeking €2.9 billion (US$3.0 billion) of capital commitments for the fund, with a €4.0 billion (US$4.15 billion) hard cap.

The investors of the fund are the Maine Public Employees Retirement System (Maine PERS), the Oregon Investment Council (OIC) and the New Jersey Division of Investment.

First, Maine PERS has approved a commitment of up €135 million (US$140 million) to the fund. Cliffwater advised the pension fund. The investment will provide the pension fund with some diversification, as some of EQT’s investments will be in Europe.

The OIC invests all State of Oregon funds, including the Oregon Public Employees Retirement Fund (OPERF). TorreyCove recommended a €200 million (US$207.8 million) commitment to EQT's fund for the OPERF Alternatives Portfolio. This commitment represents a new general partner relationship on behalf of the OPERF Alternatives Portfolio.

Finally, New Jersey Division of Investment is responsible for the investment management of the seven pension funds that comprise the New Jersey Pension Fund and the State of New Jersey Cash Management Fund. The Division is proposing an investment of up to US$100 million in the fund.

EQT Infrastructure III Fund will pursue the same strategy as predecessor funds, focusing on control opportunities in mid-sized operating infrastructure companies and/or assets with limited development and construction risk across North America, Continental Europe, and the Nordic region. Typical equity investments will range from €50-300 million with 12-14 companies in the portfolio. 

The fund will focus on sectors that have favorable market trends and adhere to the following infrastructure characteristics: providing an essential service to society, recession resilient, stable cash flows, regulation or high entry barriers, and those that provide protection against inflation. Areas of focus currently include Energy (mid-stream, power, and utilities), Transportation and Logistics (ports, rails, airports, and parking), Environmental (waste, water, and industrial), Telecom (towers, fiber, and datacenters), and Social (public services and facilities).

The fund is a continuation of the investment strategy previously deployed in EQT Infrastructure I, a €1.2 billion infrastructure fund that held its final closing in 2008, and EQT infrastructure II, a 1.9 billion infrastructure that held its final closing in 2013.