First State Investments, a global asset management business, has raised €2 billion (US$2.29 billion) for its core European Diversified Infrastructure Fund (EDIF).
The fund has attracted €721 million (US$825 million) in additional commitments during its fifth and final round of fundraising. A total of 49 institutional investors from Europe, Asia, Australia, the Middle East and North America have backed the fund. The majority of them are pension funds and insurance companies.
EDIF is a 15-year closed-ended fund and had a €1.5 billion target size. The fund's investment focus is on mature, income-generating infrastructure assets in the utilities, transportation and essential services sectors which can offer attractive risk-adjusted returns.
The fund's objective is to build a diversified portfolio throughout European OECD countries by targeting low risk, stable assets that are expected to generate attractive internal rates of return (IRR) of 10% to 15% per annum and stable and predictable cash yields of 5% to 7% per annum.
According to First State said, since 2009, it has deployed or reserved 70% of total commitments, €2 billion, in eight infrastructure companies. The firm has diversified across the water, gas, electricity, broadcasting towers and transportation sectors in the UK, Finland, Germany, Sweden, Denmark and Spain.In late October we reported that EDIF acquired 100% of Erdgasversorgungsgesellschaft Thüringen-Sachsen mbH (EVG) from E.ON and VNG - Verbundnetz Gas Aktiengesellschaft (VNG) in Germany.