Infrastructure funds raise $24.7bn in 2008

The 2008 year-end total is 28% less than the $34.3bn raised by infrastructure funds in 2007. Just $3bn was raised in the fourth quarter of 2008, according to figures compiled by placement agent Probitas Partners.

Infrastructure funds raised $24.7 billion globally in 2008, according to updated fundraising data provided to InfrastructureInvestor by San Francisco-based placement agent Probitas Partners.

Fundraising went dead in the fourth quarter

Kelly DePonte

The 2008 total is 28 percent less than the $34.3 billion raised by infrastructure funds in 2007, according to the data.

While fundraising slowed down in 2008, the slowdown wasn’t spread out evenly throughout the year. Of the $24.7 billion year-end total, $21.7 billion was raised through the first three quarters of the year, according to data released by Probitas in October.

Source: Probitas Partners. Chart by Cezary Podkul.

“Fundraising went dead in the fourth quarter basically because most LPs were frozen in place trying to figure out what was happening with their overall portfolios,” said Kelly DePonte, a partner at Probitas.

The slowdown in fundraising also coincided with more funds entering the market. In October 2008, Probitas counted 63 funds in the market or expected to come to market in the next 12 months. Their total targeted fundraising topped $94.4 billion. By year-end, Probitas counted 77 funds in the market seeking $92.3 billion of capital.

“It takes a while to launch a fund. I don’t think there’s any GP out there who said, 'Gee, November is the perfect time to launch a fund'. It’s just that that was the time that they were ready to come out with it,” DePonte explained.

DePonte ascribed the drop in total fundraising to reductions in target sizes by some of the larger funds expected to come to market and the impact of currency fluctuations. Both totals exclude funds being placed by Probitas.

Of the $92.3 billion currently being sought by GPs, $50.1 billion is being raised for developed markets, $16.9 billion for emerging markets, $4.8 billion for the Middle East and North Africa and $20.5 billion for investments globally across all regions.

Source: Probitas Partners. Chart by Cezary Podkul.