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On the face of it, Infrastructure Investor data for infrastructure fundraising in the first quarter of 2022 underscores the long-running trend that’s effectively become standard, which is consolidation. The number of funds closed continues to dip as the amount raised continues to rise. To be more specific, 24 funds raised a total of $58.69 billion this past quarter – that’s 43 percent of the $136.5 billion raised throughout 2021.
It’s also the best-performing first quarter on record. The previous record-setting Q1 was in 2020 at $44.67 billion.
A closer look at the data also points to newer trends continuing, such as mega-funds becoming more commonplace: Brookfield and GIP might be absent from the top five fund closes, but KKR and Stonepeak’s fourth funds filled that void, closing on $17 billion and $14 billion, respectively, and accounting for more than half of the total funds raised in Q1. They also closed significantly above their hard-caps, something we’ve noticed is also happening more frequently in the industry.
Q1 data, however, also featured some reversals to what we have been witnessing recently. The first is that renewables-focused funds slipped behind those targeting telecoms/digital infra, with the latter raising $3.05 billion to renewables’ $1.69 billion.
In addition, fundraising for sector-specific funds waned this past quarter, accounting for just $5.37 billion of the nearly $59 billion raised, a clear indication that generalist funds did the heavy lifting this time around.
It will be interesting to see how the rest of the year shapes up. The majority of funds currently in market have targets in the single digits, but with Brookfield’s Global Transition Fund expected to close on $15 billion and I Squared having closed its ISQ Global Infrastructure Fund III on $15 billion in April, 2022 might very well meet the high expectations Q1 has set.