Fund managers that have successfully raised a new fund in 2009 have had to work very hard to do so, given the difficult fundraising conditions. Many have been closing short of target, and a large proportion have extended fundraising due to a reduction in institutional investor appetite. This decline in activity has also been mirrored in the number of deals being completed in the infrastructure sector, specifically those involving unlisted infrastructure fund managers.
The number of deals completed by infrastructure fund managers grew year on year from 2003 to 2008, when it reached its peak at 165. 2009 has been less active, with 99 transactions being finalised in 2009 to date. This represents around a 40% drop from 2008’s total, and with just one month left in the year, this is unlikely to increase significantly. The decrease will represent the first drop in annual deal volume since the emergence of the unlisted infrastructure asset class, and is indicative of the difficult conditions that fund managers have been enduring over the past 12 months.
This blog is an excerpt from this month’s Infrastructure Spotlight feature article. To view the whole article, please sign up to Infrastructure Spotlight.