Evli's second infrastructure fund, Evli Infrastructure Fund II Ky, raised a total of EUR 72 million in its first closing. The amount is significant – if the fund's fundraising continues at the same pace, it will exceed the amount raised by its predecessor, Evli Infrastructure Fund I Ky. Evli's first global infrastructure fund reached a final size of EUR 155 million.
"Our first infrastructure fund already attracted great interest among investors, leading to a successful fundraising. Now it seems that interest in Evli Infrastructure Fund II is at least as strong. The fund is still open to investors and the next closing date is November 30. The strong start shows that unlisted infrastructure is still a very attractive asset class for investors," says Richard Wanamo, portfolio manager for Evli’s infrastructure funds.
"The successful first closing is good news for the fund's investors, as it allows the fund to start investing on a large scale from day one. Indeed, the fund has already made its first investment commitment to Arcus European Infrastructure Fund 3, which invests in European infrastructure assets within the energy, digital, and transport/logistics sectors," Wanamo continues.
What is it about this particular asset class that explains such strong interest? According to Wanamo, over the past decade, unlisted infrastructure has emerged as one of the key alternative asset classes alongside private equity, private debt, and real estate. Global assets under management of unlisted infrastructure funds more than quadrupled between 2011 and 2021, reaching around USD 1 trillion.
This growth is driven by increased allocations from both institutional investors and private wealth managers. The global economic landscape is also moving in a direction where alternative investments such as infrastructure are growing in significance.
"In the US, for instance, President Joe Biden announced an infrastructure package with significant incentives to support renewable energy and carbon capture. Furthermore, Russia's invasion of Ukraine will permanently change Europe’s energy infrastructure, as the EU and its member states seek to become energy self-sufficient. At the same time, it will accelerate the shift towards renewable energy. Other megatrends, such as population growth and urbanisation, will lead to major investment needs in all infrastructure sectors. The coming years should be a good time to invest in attractive infrastructure companies and this is also reflected in the interest we see for Evli’s Infra II fund," Wanamo analyses.
The portfolio manager points out that the benefits of investing in infrastructure also include the fact that it is a defensive asset class that has weathered cyclical fluctuations well. Thanks to its strong cash flow, it has performed well through economic cycles.
"For example, the types of infrastructure assets that Evli’s Infra II fund invests in include water and waste companies, social infrastructure, digital infrastructure such as fibre optic networks and data centres, roads and ports, energy generation and distribution companies and renewable energy. These are all assets that generate a stable cash flow."
Responsibility is also addressed
As with other Evli funds, Evli Infrastructure Fund II has a strong focus on responsibility. Evli is a signatory to the UN Principles for Responsible Investment (PRI), and Evli’s Infra II Fund has ESG analysis and monitoring integrated in its investment process.
"Sustainability is a very important theme in infrastructure investing and we require that the assets in our portfolio, which provide vital services to society, are operated and developed in a responsible manner. Investments in renewable energy also directly support the world's transition to cleaner electricity generation and are in line with the UN Sustainable Development Goals," says Richard Wanamo.
For more information:
Richard Wanamo, Investment Director, Private Assets, Evli Fund Management Company Ltd, tel: +358 50 441 0294, richard.wanamo@evli.com
