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AXA IM targets external investors with EUR 5bn infra fund

AXA Investment Managers – Real Assets (AXA IM) has launched its first dedicated infrastructure equity commingled fund, as it looks to raise up to EUR 5bn over the next two years.

The Paris-headquartered manager this year launched its AXA European Infrastructure Fund as an open-ended equity fund targeting third party investors, according to a source close to the situation and public filings.

At the end of last month, the fund raised EUR 250m of new commitments from both third-party investors and insurer AXA, the parent company of AXA IM, the source said.

AXA IM is also rolling four seed assets into the fund, including Swedish district heating network Stockholm Exergi, German healthcare company Amedes and the 1.4 GW Hornsea Two offshore wind project in the UK.

The fund has its roots in a 2018 agreement between AXA IM and three external institutional investors, the source said. The investors each committed an initial EUR 200m to co-invest alongside AXA in infrastructure deals through dedicated vehicles.

In total, AXA IM raised EUR 1.3bn from the third-party investors and AXA through this agreement, which has been invested in the four seed assets.

After receiving regulatory approval for a commingled fund structure, the assets were rolled over into the new open-ended fund, which is now open to other third-party investors.

The fund targets core and core-plus assets in Europe across the transport, energy, utilities, digital and social infrastructure sectors. It targets a net IRR of 8%-10% and a 4%-6% yield.

It invests with a buy-to-hold strategy, looking to hold assets over the long-term. The primary strategy is brownfield M&A acquisitions, although the fund can take some greenfield risk.

The fund is AXA IM’s first dedicated infrastructure equity comingled fund. The firm has made several infrastructure investments through its multi-asset strategy, AXA IM Global Secured Assets Fund, although all infrastructure investments will now be made through the new European infra fund, the source said.

AXA IM declined to comment.