Swedish private equity firm EQT closed its largest infrastructure fund to date, as market experts worry that the industry is overpaying for assets.
EQT secured €9 billion in contributions for infrastructure assets in sectors like energy, transportation and telecommunications, among others, the Financial Times reported. The company’s new fund surpassed its goal of €7.5 billion.
Pension and sovereign wealth funds contributed to EQT’s infrastructure fund, most of which will be deployed throughout North America and Europe, according to FT.
EQT is not the only one raising big sums for infrastructure deals. The Financial Times reported that Ardian, a private-equity firm headquartered in Paris, secured €6 billion for a European infrastructure fund, and that Brookfield Asset Management and Global Infrastructure Partners are trying to raise $20 billion for deals in the asset class.
Still, there is continued investor appetite for infrastructure. Unlisted infrastructure funds raised a record-high total of $90 billion in capital last year, according to research firm Preqin. Half of the investors surveyed by Prequin said they intend to up their allocations to the asset class over the long term (6 percent said they would decrease), but Preqin’s report noted potential headwinds from increased competition and higher asset valuations. [FT] — Mary Diduch