Exclusive: Elite firms tighten grip on infra fundraising

Latest figures show more capital being raised by fewer managers as LPs back follow-on vehicles.

The third quarter of 2015 was a busy one for managers on the fundraising trail but success was largely reserved to a select number of blue-chip firms, according to fresh data produced by Infrastructure Investor Research & Analytics.

At $18.41 billion, Q3 2015 saw almost as much capital raised than the previous two periods combined, with vehicles closed totalling $10.88 billion in Q1 and $10.75 billion in Q2. That brought the dry powder collected in 2015 to $40.04 billion, on track to meet last year’s total of $52.59 billion.

Echoing the trend observed since 2013, however, what could end up being another record crop for fund managers will likely end up in the hands of fewer of them. While 2011 saw 80 infrastructure vehicles, worth an aggregate $30.69 billion, hold their final close, only 62 reached the milestone last year despite more money being raised overall. The pattern was already visible in 2013, when fund managers garnered $46.43 billion through closing 67 vehicles.

This increased concentration may be explained by limited partners’ appetite for follow-on vehicles. On the Q3 podium sit Arclight Energy Partners Fund VI (closed on $5.58 billion), KKR Global Infrastructure Investors II ($3.1 billion) and Copenhagen Infrastructure Partners II (€2 billion), followed by Ridgewood Energy Oil & Gas Fund III ($1.94 billion) and DIF Infrastructure IV (€1.15 billion).

The largest debut funds closed in the quarter came next: Aquamarine Investment Partners’ North American Real Asset Fund I ($1.25 billion) and Macquarie UK Inflation Linked Debt Fund ($739 million), the first vehicle by Macquarie’s infrastructure debt unit. The list of funds closed last year also included smaller and innovative offerings, such as SolarCity Solar Rooftop Fund, which garnered $400 million, African Renewable Energy Fund, which collected $200 million, and Convergence Partners Communications Infrastructure Fund, closed on $200 million.

Dutch-based DIF managed to get in the ranking just in time to be accounted for by the Q3 statistics, having announced a final close on its latest vehicle on 30 September.

Many more funds are currently being marketed by their would-be managers, with 49 vehicles, targeting an aggregate $107.92 billion, identified in the report.