The recovery that wasn’t

In the second-most-active year ever for infrastructure fundraising, back in 2008, a total of $24.7 billion was raised globally – equating to a quarterly average of $6.2 billion. Imagine the mild ripples of excitement then when the second quarter of this year saw a total raised of…$6.2 billion.

But the ripples were only mild. After all, few will get suckered into the idea that one quarter is indicative of a long-term trend. Sure enough, with just $2.8 billion raised in the third quarter, hopes of an infrastructure fundraising recovery are back on hold. Indeed, with $11.2 billion raised so far this year, it seems unlikely that 2011 will now emulate 2010, when $19.0 billion was collected.

Says Kelly Deponte of placement agent Probitas Partners, which compiled the figures: “Certain funds have been getting push-back over fees, but things have been tremendously slow since July and you’re seeing the same pattern in private equity and real estate. You can probably put the Q3 figures down largely to a more cautious environment in general given the recent public market volatility.”

This environment, he thinks, will make life tougher for new funds while mitigating in favour of repeat commitments (“re-ups”) to funds that investors already have a productive relationship with.