• WSIP IV in market for 25 months

  • On average, infrastructure funds closed in 2023 have reached 88% of target

  • Goldman says infrastructure benefits from ‘exciting secular tailwinds’ 

October 25 (Preqin News) – Goldman Sachs Asset Management announced the final close of West Street Infrastructure Partners IV (WSIP IV) on $4bn, hitting the fund’s target 25 months after launch, despite a difficult fundraising environment for infrastructure.

Goldman said that WSIP IV has already committed $2.8bn to eight companies across sectors including organic renewable gas plants, aquaculture transportation, biomethane, battery storage, and fiber to the home broadband. The fund invests in value-added, mid-market-focused infrastructure.

The successful, if lengthy, fundraising process highlights the challenges facing infrastructure fund managers, who have on average fallen short of fundraising targets this year. Funds in 2023 year-to-date closed at an average 88% against target, compared to 116% in 2022 and 118% in 2021. 

So far this year, just 61 infrastructure funds have closed globally, raising a total $24.6bn. This represents just 14% of the $175.8bn raised in 2022 across 151 funds. The fourth quarter could see a big increase in funds raised, with 568 infrastructure funds in market being tracked by Preqin, with an aggregate capital targeted of $528.2bn. The fund pipeline includes $10bn-plus vehicles from Global Infrastructure Partners, Brookfield Asset Management, EQT, BlackRock, Stonepeak, Copenhagen Infrastructure Partners, Ardian, Antin Infrastructure Partners, and USA BioEnergy. 

Alex Murray, VP, Head of Real Assets in Preqin's Research Insights team, said: 'Investors’ enthusiasm for the infrastructure asset class saw 2022 fundraising surge well above the prior year, but denominator effects and a tempered exit environment has led to a slowdown this year. On top of that, high interest rates and inflation have deepened J-curves for primary developments. Many LPs are waiting to see where the dust settles.'

Scott Lebovitz, Co-Head of Infrastructure at Goldman Sachs Asset Management, said that the current environment necessitated a disciplined focus on risk and clear value creation strategies and capabilities, but that the long-term prospects were positive: 'The infrastructure asset class is positioned to benefit from some of the most exciting secular tailwinds associated with decarbonization, digitization, de-globalization, and demographics, each of which requires very significant mobilization of private capital.'

Those tailwinds are being augmented by government support, particularly in the US and the EU. In 2021, US President Joe Biden signed the Infrastructure Investment and Jobs Act, which provisioned $1.2tn in government spending, $550bn of which was new commitments. The Biden administration also incentivized further investment into the space with the Inflation Reduction Act, part of which was designed to boost investment into renewable energy technology manufacturing, though its impact will be greater for private equity than infrastructure. 

In the EU, there has been a greater interest in the European Green Deal, a set of proposals adopted by the European Commission to make the EU’s climate, energy, transport, and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. 


The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin providing the information in this content accepts no liability for any decisions taken in relation to the above.