Global infrastructure fundraising registered a weak start in 2015. Data collected by Infrastructure Investor shows that in the first quarter of the year, 14 unlisted infrastructure funds held a final close totalling $10.7 billion, including Blackstone’s second global energy fund which closed at $4.5 billion, and First State European Diversified Infrastructure Fund which attracted €2 billion. In comparison, the fundraising figure for the same period in 2014 was $12.6 billion. Funds have been getting bigger in recent years but, surprisingly, the average fund size in Q1 shrank to $767 million from $885 million in 2014. Although the numbers look mediocre, more time is needed to see whether the feast for infrastructure fundraising is coming to an end.
In market, there are 221 unlisted infrastructure funds seeking a total of $149 billion. This includes a £15 billion fund launched by Legal & General group to invest in UK regeneration projects. Asia-Pacific, North America and Western Europe continue to be the popular destinations. Meanwhile, Latin America is noteworthy where there is a rise in terms of the number of funds in market and combined target size.
The total value of infrastructure deals closed in Q1 2015 plateaued compared to the same quarter in 2014, but the number of deals dropped to 109 from 156, suggesting larger average deal size. Transportation surpassed energy to become the most popular sector in terms of combined deal value. Of the five largest financial closings, three are transportation projects.
Decarbonisation and European transportation have been hot topics in last few months and recent investor moves in these sectors are showcased in the ‘Industry News’ section on page 9.
In each edition of the Infrastructure Investor Quarterly Review, we invite a prominent institutional investor to share its exclusive insight with us. In this issue, Rakesh Saraf, Head of Private Investments at Alberta Teachers Retirement Fund Board (ATRF), reveals his views on the market and discusses ATRF’s investment strategy for the next 12 months.
The 2014 Annual Fundraising Review