Despite recent growth in the infrastructure fundraising market, infrastructure deal volume continues to be restricted by the effects of the financial crisis. The ongoing contraction of the credit markets and lack of available bank debt means that many deals are dependent of increased equity ratios and/or a reduction in asset valuations. As a result, a significant increase in the number of deals being made by fund managers in 2010 is unlikely.
Unlisted infrastructure fund managers have reported 27 completed deals so far in 2010, just over half those completed in Q4 2009 and less than the 42 deals reported at the same point last year. In terms of industry, core infrastructure sectors have dominated 2010 deal activity. The energy and utilities sectors are most prominent, with 12 and seven deals completed in these industries respectively. Four deals have been made in the transportation sector, three in healthcare and one in telecommunications. In terms of geographic location, 13 deals have been made in Europe, eight in North America, five in Australasia and one in Asia.
A number of significant deals have been made in 2010, including the USD 505 million purchase of NorTex Gas Storage by Alinda Infrastructure Fund I in April. Alinda purchased the asset from Falcon Gas Storage, a wholly owned subsidiary of Arcapita. NorTex is the owner and operator of two natural gas storage facilities located in northern Texas.
For more information on infrastructure deals involving unlisted infrastructure fund managers, see our Infrastructure Online service.