EQT targets €1bn for infrastructure(3)

The Nordic group has told investors that it is planning to add yet another string to its bow, with the launch of a €1 billion infrastructure fund.

EQT, the Nordic alternative assets manager, has revealed plans to extend its brand into the burgeoning infrastructure sector, with a €1 billion fund under target.

In a letter to about 280 investors, Conni Jonsson, the firm’s co-founder and managing partner, said EQT intended to capitalise on the growing interest in and enthusiasm for public private partnerships in Scandinavian governments.

EQT’s plans mark the next step in the firm’s evolution, which has seen it grow from a Nordic buyout firm to a multi-product alternative asset manager. Some of the firm’s competitors have grown by raising increasingly large funds, but EQT has opted to broaden its product range.

Its range now includes a mid-market buyout franchise in Europe and China; a special situations team which manages an opportunity fund; and an expansion capital unit, which can offer a blend of debt and equity.

Infrastructure sits logically with EQT’s intention to diversify while remaining true to its core disciplines. 3i, Europe’s largest listed private equity company, has also pursued infrastructure as a complement to its buyout and expansion capital businesses, raising £700 million by floating a fund on the London Stock Exchange.

EQT’s timing coincides with an increased willingness in the Scandinavian region to look outside the public purse for the financing of large infrastructure projects. Norway and Finland both have PPP projects under way. Sweden is the last to join the fray.

The Swedish Road and Rail Authority made a recommendation in June for the increased use of PPP funding to the government, which is expected to take the next step imminently and put a budgetary proposal before the Swedish parliament. However, named projects are not expected until next March.

Anders Bjorklund, a consultant with PricewaterhouseCoopers and co-ordinator of the Swedish government’s review of public private partnerships, told PEO: “PPP will not replace traditional procurement, but it is something the Swedish government finds interesting. The general principle and direction are clear: for appropriate, larger projects PPP will be used if efficiency benefits can be presented as a probable outcome of commercial negotiations. What we are refining now is the decision-making process.”

He said there was a regional interest in creating a common market for construction work to improve competition across borders.

Åsa Torstensson, Svenska Minister for Communications, Ministry of Enterprise, Energy and Communications, said in a statement: “Tomorrow’s infrastructure must link people and regions in an efficient, energy-effective, environment-friendly and secure manner.”

MVision is acting as placement agent, but declined to comment. EQT declined to comment.