Unlisted natural resources funds raised a record $93bn in 2018, surpassing 2017’s record of $91bn. This is despite the number of funds closed falling from 145 the previous year to 91 in 2018. Preqin expects this year’s figures to rise by up to 10% as more information becomes available.
Energy-focused funds accounted for almost all of the year’s activity as 77 funds raised $89bn. By comparison, just four metals & mining funds closed and raised $2.5bn.
Furthermore, over half (57%) of natural resources funds exceeded their targets in 2018, indicating that investor appetite outstripped fundraising capacity.
Key natural resources fundraising stats:
- In 2018, 91 unlisted natural resources funds closed, raising an aggregate $93bn. This marks a five-year low in the number of funds closed, but represents a record high in capital raised.
- Energy-focused funds accounted for the bulk of fundraising activity, as 77 funds raised $89bn.
- A further seven agriculture/farmland funds raised $0.7bn, four metals & mining funds secured $2.5bn and three timberland funds raised $0.9bn.
- In fact, all 10 of the largest funds closed in 2018 were energy focused, including the largest, the $7.4bn KKR Global Infrastructure Investors III.
- North America-focused funds made up the largest proportion of activity, with 51 funds focused on the region raising a combined $58bn. A further 25 Europe-focused funds raised $28bn.
- This marks the first year in which over half (57%) of funds exceeded their initial target size, while a further 18% hit their target.
- As at June 2018, unlisted natural resources dry powder stands at a record high of $238bn.
- Looking forwards, there are a record 305 funds in market targeting an aggregate $188bn. Of these, 213 are energy-focused funds seeking to raise a total of $162bn.
Preqin’s Patrick Adefuye, Head of Real Assets, commented: “2018 marked a record year for natural resources, with funds raising close to $100bn – a new high for the industry. Energy funds in particular had a banner year, accounting for the vast majority of total natural resources fundraising activity. The energy market has typically dominated natural resources, which may be an impediment to the asset class’s long-term success: although other sectors are less crowded with competing fund managers, they also see less attention from investors and so struggle to grow.”
The 2019 Preqin Natural Resources Report is due for release soon, which contains more detailed fundraising data, as well as comprehensive data on fund managers, investors, performance and much more. In the meantime, please take a look at our 2018 Fundraising Update or browse Insights for more of our recent research.
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