Infra funds raise $10bn in H1 2010

Despite a slight slowing of momentum in the second quarter, the infrastructure fundraising revival is still on course, with the amount of capital raised in the first half of this year almost reaching the total for the whole of 2009.

Infrastructure funds globally raised $9.9 billion in the first half of 2010, almost reaching the $10.7 billion raised in the whole of last year, according to data from placement agent Probitas Partners in its “Investing in Infrastructure Summer 2010” report.

However, the second quarter figures showed a deceleration in funds raised at $4.0 billion, down from the $5.9 billion collected in the first quarter.

Infra fundraising: H1 2010
almost reaches last year's
total fundraising

The figures indicate that infrastructure fundraising is moving back up towards pre-Crisis levels. Global infrastructure fundraising reached a peak of $34.3 billion in 2007, before falling back to $24.7 billion in 2008.

According to Probitas, the top five fundraisings in the first half of 2010 (capital closed during this period only) were: Energy Capital Partners II ($2.25 billion); GS Infrastructure Partners II ($1.1 billion); Marguerite Fund ($1.02 billion); Alinda Infrastructure Fund II ($597 million); and HSBC Infrastructure Fund III ($580 million).

The report discovered a bulging pipeline of funds being raised for infrastructure investment but not yet closed. Against the almost-$10 billion raised so far this year, some 89 closed-end funds are currently seeking over $72 billion in capital.

There are also signs that emerging markets are increasingly on investors’ radars. Probitas found that 70 percent of closings in the first half of 2009 were for funds heavily focused on the developed markets of North America and Europe, but that over 50 percent of funds currently trying to raise money are focused on Asia or other emerging markets.

Probitas identified three long-term factors driving the supply and demand of infrastructure capital: institutional investors’ (especially pensions) need for current income generating, long-term assets that better match their long-term liabilities; the need for governments globally to find alternative financing methods to build, maintain and operate public sector infrastructure; and increased recent government support for infrastructure programmes as part of economic stimulus programmes.