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Exclusive: F2i seeks $3.5 billion in record fundraising by Italian fund
October 18, 2017 / 5:50 PM / a month ago

Exclusive: F2i seeks $3.5 billion in record fundraising by Italian fund

MILAN (Reuters) - Italian infrastructure fund F2i is in talks with investors to raise at least 3 billion euros ($3.5 billion) in what would be the biggest ever fundraising by an Italian investment firm, four sources familiar with the matter told Reuters.

F2i, which is 14 percent owned by Italian state lender Cassa Depositi e Prestiti (CDP), is in discussions with Singapore’s sovereign wealth fund GIC [GIC.UL], one of the sources said, adding there was considerable interest from overseas investors.

The fundraising comes as yield-hungry investors look to pour money into infrastructure globally. Heavyweight U.S. funds such as Brookfield Asset Management (BAMa.TO) and Global Infrastructure Partners have raised record amounts of money over the past 18 months for infrastructure investment. Most recently, U.S. private equity firm Blackstone (BX.N) and Saudi Arabia’s main sovereign wealth fund said they planned to create a $40 billion vehicle to invest in infrastructure projects.

If successful, Milan-based F2i’s new fund - called Fund III - could raise more than 3 billion euros with Italy’s CDP also touted as a possible investor, the sources said.

Mediobanca and BNP Paribas are advising F2i on the deal which could be finalised as soon as this year.

The companies mentioned declined to comment or were not immediately available.

F2i, led by former A2A (A2.MI) utility executive Renato Ravanelli, is one of Italy’s leading renewable energy players with joint investment platforms with Europe’s biggest utility Enel (ENEI.MI) and EDF’s (EDF.PA) Italian unit Edison.

It is looking to create a fiber network hub across Italy and could use part of the money to fund more telecoms deals as Italy presses ahead with plans to renew its digital backbone that lags European peers.

F2i, whose shareholders also include Italian banks Intesa Sanpaolo (ISP.MI) and UniCredit (CRDI.MI) as well as China Investment Corporation (CIC), ranks as Italy’s No. 2 gas distributor.

It used resources from its earlier Fund I to clinch a deal to buy Gas Natural’s grid assets in Italy through its 2i Rete Gas unit that sources said could be worth around 700 million euros.

SHIFTING ASSETS

The Italian fund will use 1.5 billion euros from the new fundraising to buy out investors in Fund I and transfer assets such as 2i Rete Gas into Fund III, the sources said.

F2i raised 1.8 billion euros in 2007 when it launched Fund I which has now been drawn down. Its investors have been given the option to cash out or re-invest into Fund III, as the Italian firm wants to keep plowing money into its companies that include airport firm 2i Aeroporti, which controls Bologna airport, the sources said.

Its Fund II, which has a majority stake in renewable energy firm E2i Energie Speciali, will remain unaltered. It raised 1.2 billion euros in 2015 and has yet to deploy all of its capital.

Appetite for Italian infrastructure investments is on the rise with Germany’s Allianz taking a stake with other investors in the Italian motorway unit of toll-road group Atlantia (ATL.MI) earlier this year.

Singapore’s GIC has clinched a series of property deals in Italy including the full takeover of Italian mall RomaEst Shopping Centre. Last year it took control of several logistics centers in Italy as part of its 2.4 billion euro purchase of European logistics property firm P3 Logistic Parks.

Additional reporting by Massimo Gaia; Editing by Mark Potter

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