Eurazeo has announced the first close of its inaugural Eurazeo Transition Infrastructure fund, raising €210 million after eight months.
Paris-based Eurazeo is the largest investor in the debut vehicle at first close, thanks to a €100 million GP commitment. The first close also includes a €75 million cornerstone investment from the European Investment Fund, through a mix of funds from the European Investment Bank and InvestEU. The remainder comes from European and North African institutional investors, including pension funds, funds of funds and banks.
The vehicle is expected to close within 12 months, although the final close could happen sooner, with more investors likely to come on before the end of the year and in Q1 2023.
The dark green fund’s strategy is core-plus and value-add, which requires Eurazeo to take a strong direct interest in each investment.
“Eventually, we want to take on majority shares. But on the way, we may come in as a minority and then increase our equity stake. For me, the important thing is that we have governance so that we can push our agenda on financial performance but also on sustainability. As an article 9 fund, you need to be able to properly report on your sustainability objectives,” says Laurent Chatelin, head of infrastructure at Eurazeo.
The aim is to invest in 10 to 12 companies with a ticket size of €50 million to €150 million.
Geographically, the fund’s focus is OECD Europe, and it will target investments in energy and digital transition, clean transport and in the circular economy.
Already, the fund has invested in three of these sub-sectors. The three investments are Ikaros Solar, a Belgian rooftop solar provider; Resource, a joint venture with Quantafuel for a plastic waste sorting plant in Denmark; and Electra, a French company specialising in fast charging of electric vehicles.
“The market environment is difficult. But with the right strategy, with the right setup and the right team, then when you have good projects, investors always find the capital,” adds Chatelin.
Chatelin even sees a hint of a silver lining on the economic clouds hanging over Europe: “The current turmoil in the energy market is providing a lot of tailwind for our investment strategy. Both in the energy space but also in the other transitions.”