An energy boost

In a sign that the market is recovering, the first quarter fundraising tally for infrastructure globally was a robust $5.9 billion, according to figures from placement agent Probitas Partners.

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This is three times the anemic first quarter 2009 fundraising tally recorded by Probitas last year, and more than 50 percent of the 2009 total.

“I was expecting there to be some sort of pick-up, but basically 50 percent of the level of last year was not what I was expecting,” Kelly DePonte, a partner at Probitas, told Infrastructure Investor.

If there was a hidden story in the figures, it was the strength of energy-focused infrastructure funds.

More than $2 billion went these funds in the quarter, including: a $500 million first close for the First Reserve Energy Infrastructure Fund; a $1.25 billion close by Energy Capital Partners II (following a $1.75 billion close in December 2009); and a $300 million close for a midstream oil and gas infrastructure fund managed by EnCap Investments, according to Probitas estimates.

Further evidence of the continued appetite for energy came in the form of two news stories that broke immediately after we published these figures.

Firstly, First Reserve said in a press release it had hired an asset manager for its infrastructure team: 30-year General Electric energy veteran Phil Burkhardt. One can only venture to guess that the firm’s infrastructure team must be getting ready to make its first acquisitions – and that, naturally, must mean that it has money to spend.

Secondly, EnCap held a final close on the above-mentioned midstream fund, the EnCap Energy Infrastructure Fund, on $791.6 million. The close, said EnCap managing partner Bill Zorich, would have been even larger had it not been “considered a first-time fund” by a number of investors. The private equity firm has been investing in the oil and gas sector for years, but this was its first foray specifically into the midstream infrastructure sector.