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The 2012 Infrastructure Fundraising Market:

by Elliot Bradbrook

  • 10 Jan 2012
  • INF

In 2011, 28 unlisted infrastructure funds reached a final close, raising an aggregate $16.1bn in investor commitments.  Although annual fundraising did not reach the levels seen in 2010, the majority of capital raised during 2011 was fresh capital, showing that institutional investors are still looking to make new commitments to unlisted infrastructure funds.

As of January 2012, there were 144 unlisted infrastructure funds on the road seeking an aggregate $93.2bn in total capital commitments.  This represented a record number of funds in market and an improvement on the $85.8bn being sought by the 122 funds that were on the road in January 2011.  In addition, six infrastructure funds of funds and five real asset fund of funds were on the road seeking to raise capital in January 2012.

Europe remains the most prominent region for infrastructure investment both in terms of the number of funds on the road and aggregate target capital with 59 European funds in market seeking $40.7bn in total capital commitments.  North America-focused funds are also significant, with 31 funds on the road targeting $27.1bn, while 28 funds in market are seeking to raise $11.9bn to invest in Asian opportunities.  A total of 26 funds are focused outside of these core markets illustrating the growing importance of the emerging economies particularly in South America and Africa.

The majority of unlisted infrastructure funds on the road seek a diversified portfolio and achieve this by investing across multiple project stages.  As a result, 73% of infrastructure funds currently raising capital will consider investing in assets at varying stages of development.  69% of vehicles will invest in greenfield projects, 81% in brownfield projects and 54% will consider more established secondary stage opportunities.

Going forward, it is likely that infrastructure fund managers will look to extend the fundraising process and hold more interim closes in order to begin investing capital sooner.  Of the 144 funds on the road, 67 vehicles seeking an aggregate $51.3bn have held one or more interim close.  These funds have already secured $18.7bn in total capital commitments from institutional investors

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