Despite the positive growth in the fundraising market, infrastructure deal volume remains restricted by the ongoing contraction of the credit markets and high asset valuations.
In Q3 2010, unlisted infrastructure fund managers reported 38 completed deals, the lowest quarterly total this year, and the fewest since Q2 2009. In terms of geography, Europe was the most prominent region, accounting for 19 of the 38 deals made during the quarter. Asia and North America were also prominent with 10 and seven deals made in each region respectively. Two transactions were completed in assets located in Australasia.
As expected, core infrastructure industries such as energy, transportation and utilities dominated Q3 2010 deal activity. 15 deals were completed in the energy sector, 11 in transportation and three in utilities. Six deals were made in social infrastructure assets, along with two in waste management and one in the telecoms industry.
A number of significant deals were completed in Q3 2010 including the purchase of an 80% stake in the Endesa Gas Network by GS Infrastructure Partners II. The deal was expected to value the stake at around €1bn consisting of approximately €800mn in debt financing provided by a group of 10 banks including Santander, Caja Madrid and BBVA. The Endesa Gas Network includes 4,050km of gas distribution pipelines and 859km of gas transport pipelines in Spain.
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