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Infra fundraising hits all-time high in Q1

Propelled by Global Infrastructure Partners’ record $15.8bn fund, the number of funds in the market continues to dwindle.

Infrastructure fundraising reached a record level of $28.7 billion in the first quarter of this year, data from Infrastructure Investor Research and Analytics has revealed.

The figure represents a 26.4 percent increase on the $22.7 billion raised during the corresponding period in 2016 as Global Infrastructure Partners’ $15.8 billion fund – the largest ever in the market – ensured the asset class’s fundraising continued to rise.

The fund, which is targeting a net IRR of between 12 and 15 percent, attracted capital from a pool of 191 global investors, about half of which were new to GIP’s platforms.

With that in mind, the data show towards an acceleration of the trend of more money being diverted towards far fewer funds in the space. After 2015 showed a record 97 closings, last year saw a startling fall to 64 infrastructure funds being closed. With Q1’s $28.7 billion being raised from just 14 vehicles, the sector is set for the lowest number of closings in a year since the throes of the financial crisis in 2009.

Joining GIP on the larger side of the market included EQT Infrastructure III (€4 billion), Actis Energy 4 ($2.75 billion) and QIC’s A$2.35 billion ($1.79 billion; €1.69 billion) Global Infrastructure Fund. Along with GIP, these four funds accounted for 86.7 percent of the total capital raised. They were supplemented by mid-market vehicles such as SL Capital’s first £516 million ($649 million; €607 million) infrastructure fund and Ancala Partners’ UK-focused platform that reached close to £400 million.

The energy and transport sector are the focus for the majority of the 14 funds that closed in the quarter, while five vehicles have more diversified strategies.