Goldman, Macquarie close infrastructure funds below target

Goldman Sachs and Macquarie Group have each finished up the fundraising for their second US-based infrastructure funds, scooping up a collective $4.7 billion in commitments against a combined fundraising target that once topped $13.5 billion.

The Goldman fund, Goldman Sachs Infrastructure Partners II, reached a final close on $3.1 billion at the end of March, according to a person familiar with the firm’s fundraising effort. The original target for the fund, which has been in the market for at least two years, was $7.5 billion, according to several fundraising data services.

In February, InfrastructureInvestor.com reported that the Goldman fund was close to wrapping up its fundraising and would reach a final close in two months’ time on $3 billion.

The fund was a successor to Goldman Sachs Infrastructure Partners I, which closed on $6.5 billion in December 2006, according to a press release. The fund invested in several port and toll road assets, including Associated British Ports, port terminal operator Carrix, and FARAC I, the first package of toll roads privatised by the Mexican government. Goldman and partner ICA submitted the winning bid of $4.1 billion for a 30 year concession on the central Mexican toll roads in 2007.

The fund was originally co-headed by William Young and Steven Feldman. But Young left the firm during the fundraising period for the second fund, leaving Feldman in charge.

The Macquarie fund, Macquarie Infrastructure Partners II, has held a final close on $1.6 billion, according to a person familiar with the firm’s fundraising effort. Fundraising data services originally listed the fund’s target at $6 billion but more recent data listed the target at $4 billion. The fund had been in the market for at least two years.

The fund was a successor to Macquarie Infrastructure Partners I, which closed on $4 billion in May 2007 The fund invested in several port and toll road assets, including two Canadian port terminals, Halterm and Fraser Surrey Docks, and the Indiana Toll Road, the Chicago Skyway and the South Bay Expressway, which recently filed for bankruptcy. The fund also invested in utilities, including electricity provider Duquesne Light Holdings and water provider Aquarion Company.

The fund is headed by New York-based Chris Leslie.

The final closes come just as data is beginning to indicate that the fundraising market may be beginning to accelerate. In the first quarter of the year, infrastructure funds globally closed on $5.9 billion in commitments, according to data from Probitas Partners. That’s more than half of the $10.7 billion the placement agent counted for all of 2009 as the difficult economic environment drastically reduced institutional investors’ ability to make commitments to illiquid asset classes such as infrastructure and private equity.

Both Goldman and Macquarie launched their funds before the financial crisis had intensified in the fall of 2008. However, it is unclear whether the difficult fundraising climate alone accounted for the firms' less-than-targeted fundraising, as successor funds overall tend to draw stronger investor appetite than first-time funds.

A spokesperson for Goldman declined to comment. A spokesperson for Macquarie declined to comment.