Zayo bidder EQT to raise €14bn in new funding round

Zayo bidder EQT to raise €14bn in new funding round

15 January 2020 | Alan Burkitt-Gray

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Stockholm-based infrastructure investor EQT is trying to raise €14.75 billion for its next round of spending.

EQT has not said what its intentions are for the new fund, but in October 2019 it bought a German broadband fibre company, Inexio, for €1 billion and it was reported to be wanting to buy EdgeConneX for $2.5 billion.

But the biggest deal known to be on EQT’s books at the moment is its joint venture with Marc Ganzi’s Digital Colony to buy Zayo for total of $14.3 billion, an agreed deal expected to be completed in the first half of this year.

The new fund – EQT IX – is the investor’s largest ever. Three separate funds over the past two years raised €20.67 billion, with the biggest being €10.91 billion for EQT VIII in 2018.

EQT said last night: “The actual fund size is dependent on the outcome of the fundraising process and may ultimately be higher or lower than the target size.”

The investment company – which is listed on the Stockholm-based stock exchange Nasdaq Nordic – said EQT IX would be “materially in line with predecessor fund EQT VIII”, and it pointed out that it started a new fund-raising cycle “when the predecessor fund is close to being fully invested”, implying that close to €10 billion of the 2018 fund has been spent on new investments.

It explained: “This means that the commitment period of the predecessor fund typically ends when approximately 80-90% of its total commitments are invested, with remaining commitments used primarily for add-on acquisitions and strategic capital injections as well as for ongoing expenses.”