First State raises €700m for First State European Diversified Infrastructure Fund II

First State Investments has announced its European Diversified Infrastructure Fund II completed its first fundraising series reaching its target of €700 million (US$767 million) from global institutional investors.

Targeting €2 billion (US$2.19 billion) with a cap at €2.5 billion (US$2.74 billion), the successor fund to EDIF I, EDIF II, will pursue the same investment strategy of constructing an infrastructure portfolio of assets targeting primarily utility, energy and transportation investments in Europe. Around two thirds of investors in the predecessor fund have joined.

Philippe Taillardat, Partner, Infrastructure Investments at First State Investments said: 

“This series is the second largest we have raised across our global fund range. We benefited from a 65% re-up rate for series 1 from existing EDIF I investors. We have already deployed over one third of the capital raised for EDIF II by investing in Coriance and Finerge/Ancora Wind. Our investors have been pleased with this rapid capital deployment, our highly selective process and the quality of the underlying investments.

The past 18 months have witnessed the emergence of direct investors who dominate the limited number of large, very competitive infrastructure investments as well as the first few mega-funds within the infrastructure space. This has reinforced our conviction that a ‘buy and hold’ strategy focused on the European mid-market is relevant as we see less competition and more rational pricing which better enables us to deliver long-term sustainable value to our investors through pro-active asset management.

We are excited to enter the next series of EDIF II which we anticipate will run from September 2017. Our pipeline looks promising and we are pleased with the volume of interest we have received from both current and prospective investors globally.”

Coriance builds and operates district heating networks under public services contracts with municipalities and cities across France. The acquisition of Ancora Wind was funded through long-term bank debt and an equity capital increase at First State investee company Finerge. With a forecast annual production of approximately 470 GWh, Ancora Wind's portfolio comprises four wind farms in Portugal totalling 171 MW.