First close approaches for €1.5bn Europe fund

First close will occur by summer on a €1.5 billion ($1.6bn) Europe-focused infrastructure fund.

Patrizia’s European Infrastructure Fund III, which launched in late 2022, will raise around a third of its target, according to a source, thanks in large part to strong reups.

The fund will make around 10 deals with a ticket price of €150 million, and offers returns of 10-12% net.

European Infrastructure Fund III will make its first deal in Q3, and is understood to be close to entering into exclusivity on several projects.

Its strategy is a continuation of predecessor fund Patrizia European Infrastructure II and will target the middle market segment with investments made in equity across:

  • energy
  • environmental services
  • social infrastructure
  • telecom
  • water

Target geographies are: the Nordics, Southern Europe, the UK and Western Europe.

The fund has a 12-year term with 3x 1-year extensions of which the first is at GP discretion, and subsequent ones with LP approval.

Patrizia European Infrastructure II is expected to make a final deal following syndication of recent investments. The fund is expected to beat its advertised return rate of 9% by several percentage points owing to strong performance of its investments.

It launched in March 2018, and held its final close in January 2022 at €580 million.

The latest investment of the fund marked Patrizia’s first investment in Spain, where it backed 2 mid-market Spanish broadband and fibre operators in the southern province of Cadiz: Wifi Sancti Petri while Airwifi.

Weil Gotshal & Manges is legal adviser to the latest fund.