“In the old world, you managed to raise a fund between family and friends. Now, it’s much more demanding,” argues Mathias Burghardt, head of infrastructure for newly independent AXA Private Equity (AXA PE), in Infrastructure Investor’s May 2013 keynote interview.
Fresh from raising €1.75 billion for infrastructure investing – €1.45 billion committed to AXA PE’s third infrastructure fund and a further €300 million allocated for co-investment – Burghardt points out how much wider fund managers have to cast their nets when they go out to the market nowadays: “We have about 40 LPs [for Fund III] and some 24 are new investors – not just new to infrastructure, but new to AXA PE.”
But it’s not just that nets have to be cast wider; the fish that are being brought to the surface are now also quite different.
“Previously, insurance companies represented 70 percent of our LPs; now they only represent some 40 percent. What’s changed? Pension funds. They are now very much the dominant LPs in the market. That’s because, with Solvency II, maturity matters for insurers – there is a price for maturity. Pension funds are not there yet, so today they are our biggest clients,” Burghardt explains.
“The second big change is geography. Before this fundraising, we had no German investors; now they are the number one investor base. And it’s a diversified investor base, including pensions, insurance companies, funds-of-funds… That says a lot about how the market’s changed,” he adds.