First-Time Infrastructure Fund Managers – March 2013

by Julia Goodall

  • 12 Mar 2013
  • INF

Preqin is currently tracking 142 first-time unlisted infrastructure fund managers, 66 of which are currently in the process of raising their first fund. These funds are seeking to raise an aggregate $24bn and have an average target size of $393mn. This is significantly smaller than the average target size of $771mn for vehicles currently being raised by more experienced fund managers. Closed or liquidated first-time infrastructure funds have raised an aggregate $32.7bn. The average amount raised per fund was $404mn, which is 26% less than the $547mn average target size of these vehicles.

Infrastructure funds managed by more experienced fund managers tend to attract higher levels of capital. The average target size for funds closed by experienced managers was $697mn and the average final close figure was $673mn, only 3% short of the target. Many investors do not invest with first-time fund managers due to their lack of experience and the fact that they have no prior performance history to demonstrate their ability to achieve attractive returns on their investments. However, attracting investor commitments in the current market is difficult regardless of experience; 42% of first-time funds currently raising have spent over two years on the road, while 41% of follow-on funds have spent over 24 months fundraising.

Several infrastructure fund managers have been successful in raising their first funds in recent years. Notable first-time fund managers include Patria Investimentos, which raised $1.2bn for its P2Brasil fund in 2011; Kohlberg Kravis Roberts, which raised $1.04bn for its debut infrastructure fund in 2012; and Marguerite Advisor, which secured $947mn for the Marguerite Fund also in 2012.  

In terms of manager location, 37% of the 142 first-time infrastructure fund managers tracked on Preqin Infrastructure Online are based in Europe and 26% are based in North America. Twenty percent are based in Asia, 8% are based in the Americas, and 10% are based outside of these regions. In the experienced fund manager universe, 37% are located in Europe, 37% are based in North America, 10% in Asia, 3% in the Americas and 13% in other Rest of World regions.

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