Alternatives in 2019: Infrastructure Fundraising Continues to Break Records

by Naomi Feliz

  • 14 Jan 2019
  • INF

Unlisted infrastructure fundraising marked an all-time high in 2018 – its second consecutive annual record – and seems likely to do so again in 2019. Sixty-seven funds closed in the year, down from 94 in 2017, but capital totals reached $85bn. This is significantly up from the $75bn raised in 2017, and Preqin expects these figures to rise by up to 10% as more information becomes available.

2019 could yet surpass even this level – there are 208 funds in market at the start of the year, seeking a combined $193bn, both record highs. Among them are Brookfield Infrastructure Fund IV and Global Infrastructure Partners IV: each is targeting $20bn, which would make them among the largest private capital funds of any type ever raised. If they both fulfil their targets, they would account for half of 2018’s fundraising total alone.

Key infrastructure fundraising stats:

  • Sixty-seven unlisted infrastructure funds closed in 2018, raising a combined $85bn. This is a record capital total for the asset class.
  • Twenty-two North America-focused funds raised $44bn, while 33 Europe-focused funds secured $35bn.
  • The year was dominated by mega funds, and the average fund size rose from $864mn in 2017 to $1.3bn.
  • Fundraising was broadly successful – 71% of funds closed in the year exceeded their targets, the largest proportion for any year recorded.
  • Aided by record fundraising, dry powder has climbed to a new record of $172bn as at December 2018.
  • Four funds raised $5bn or more, the largest being the $7.4bn KKR Global Infrastructure Investors III.
  • Looking ahead, 208 funds are in market targeting an aggregate $193bn in January 2019 – a record high.
  • The largest of these are Brookfield Infrastructure Fund IV and Global Infrastructure Partners IV. Each is targeting $20bn, which could make them the largest infrastructure funds ever and among only six funds to ever reach $20bn.

Preqin’s Patrick Adefuye, Head of Real Assets, commented: “It is hard to overstate the prodigious growth of the infrastructure fundraising market in recent years. 2018 saw the asset class secure almost twice as much capital as it did as recently as 2014, having set three consecutive annual fundraising records. It is testament to the appetite that investors have for infrastructure – its diversification, inflation-hedging and income stream potential are all key advantages, especially given the concerns many investors have about a prospective market downturn. However, it does seem that investors are becoming more selective, and are opting to commit to established rather than emerging managers. While the largest firms are able to set successive fundraising records, the number of funds closing overall is falling, putting more pressure on smaller firms with vehicles in market.”

The 2019 Preqin Infrastructure Report is due for release soon, which contains more detailed fundraising data, as well as comprehensive data on fund managers, deals and exits, 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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