In brief: Eurazeo raises €400m for second ‘smart city’ fund

Development finance institutions, sovereign wealth funds and corporates pushed the fund beyond its initial target, drawn in part by its 'clear impact component'.

Listed private markets firm Eurazeo has held a final close on its second Smart City Fund, a strategy that invests in climate tech businesses, primarily in Europe.

It has raised €400 million from five state-related entities (EIF, BpiFrance, PFR, FRC and KVIC) and 18 corporations, the firm said this week. The corporate investors include: EDF, TotalEnergies, Stellantis, Hager Group, ZF, RATP, Mainova and SWK AG, Duisport (all from Europe); and from Asia: Banpu, Momentum Venture Capital (past of SMRT), SP Group, Jardine Pacific, IMC Pan Asia, Sansiri and SCG.

The fund’s predecessor was a €137 million vehicle that closed in February 2018. Its initial target for Fund II was €250 million, according to New Private Markets’ database. The fund is classified as Article 8 under EU SFDR.

Closing above target is becoming less common amid a tough market. “The environment is difficult,” said a spokesperson for Eurazeo, “but the fact that the team has demonstrated experience in its sectors and that it has a clear impact component has raised investors’ appetite.”

Eurazeo is also raising a sustainable maritime fund and an energy transition infrastructure fund.