Europe: The Centre of the (Infrastructure) Universe

by Elliot Bradbrook

  • 17 May 2011
  • INF

According to Preqin data, 126 unlisted infrastructure funds primarily focused on Europe have entered the market since 2004. 79 of these funds have held a final close, raising an aggregate $51.3bn, and a further 47 funds are currently in market seeking $33.3bn in investor capital. In 2011 to date, three Europe-focused infrastructure funds have held a final closing raising an aggregate $1bn. 16 more Europe-focused infrastructure funds are expected to be launched by unlisted managers during 2011, which will increase the amount of capital available for infrastructure investment in Europe over the coming years.

Macquarie European Infrastructure Fund II, managed by Macquarie Infrastructure and Real Assets (MIRA), is the largest Europe-focused vehicle to close raising €4.6bn. The vehicle invests in a range of economic infrastructure sectors in the brownfield and secondary stages of development and closed in May 2007. In December 2010, the fund acquired a 66.7% stake in Fortum Värme District Heat Operations, an operator of heat production facilities in Sweden for SEK2bn. The vehicle has also completed transactions in a range of other European countries including Denmark, Belgium and the UK.

47 Europe-focused funds are currently in market targeting $33.3bn in investor commitments; more capital than their US and Asia and Rest of World counterparts. 51 funds focused on Asia and Rest of World are also in market along with 32 vehicles targeting North American opportunities.  North America-focused funds are seeking $30.6bn and Asia and Rest of World funds are targeting $26.9bn from investors.

48% of Europe-focused infrastructure vehicles currently on the road are being raised by managers headquartered in the UK. The largest fund being raised by a UK-based manager is RREEF Pan-European Infrastructure Fund II, managed by RREEF Infrastructure. The vehicle is targeting €3bn in investor commitments to invest in a range of infrastructure assets. Outside of the UK, France is home to 11% of managers with a Europe-focused infrastructure vehicle in market. Australia is the only non-European nation that is home to managers currently raising a Europe-focused fund, with 6% of GPs located there.

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