A newly-formed Swedish investment fund in infrastructure states that it can undertake to maintain a 50-100 year holding period for investment in private power infrastructure enterprises in the country.
Last year Polhem Infra was founded as a special fund for Swedish public pension funds AP1, AP3, and AP4 for 9 billion SeK dollars (930 million Dollars).
Pelham Infra, CEO Mikael Lundin said that he was seeking “evergreen” holding periods in comparison with traditional seven-year cycles of private equity for his target investments— indefinite commitments without plans to exit the business.
The direct investment of Polhem Infra will be primarily concentrated in renewable Swedish energy firms and some digital infrastructure.
Lundin has claimed that the energy industry-which to date mostly belongs to municipalities that do not wish to sell “risky” foreign buyers-is well-equipped for new deals, despite the national ownership of the former and the latter’s little supply.
Although the “century portfolio” of this relatively new Nordic infrastructure fund may be rather more ancient, the global private equity room has shown a shift towards longer holding periods. Blackstone’s rapid succeeding in raising 5 billion dollars for a long-term buyout fund was cited by analysts at Bains Capital, while Core Equity and Cove Hill raised two new funding for the first time, each with an approximate holding period of up to one billion dollars.
The new rules also mean that the fund will no longer need to invest at least 10% of its assets in external investors, which fund managers support despite their excessively high management fees. This is a change that is appreciated.
The Swedish public pension funds, on Polhem Infra’s website, have a long record of acquisitions, including the local property giants Rikshem, and Ellevio electrical utilities, of the building of profitable private companies on real estate.