Renewable energy and debt funds help fundraising recovery

The modest upturn in infrastructure fundraising seen since the nadir of 2009 is continuing, with the total amount raised globally in 2012 likely to exceed the 2011 total. Renewable energy and debt funds are having a growing impact.

Global infrastructure fundraising in 2012 had reached $16.9 billion by the end of the third quarter, according to new figures from placement agent Probitas Partners. With $7.0 billion raised during Q3, it appears there is sufficient momentum for the 2012 end-year total to move past the $20.8 billion total for the whole of 2011.

Renewable energy and debt funds are assisting this momentum. At the end of the second quarter, renewable energy fundraising accounted for a mere 4 percent of the total – but this has now risen to 15 percent. Debt funds, which have appeared on the fundraising radar for the first time this year, have continued to make an impression – up from 9 percent of the total at the end of Q2 to 12 percent now.

The third quarter showed continuing investor support for European and North American strategies, with more than two-thirds of capital raised focused on these markets (including global funds with a heavy bias to these markets). However, Latin America grabbed a 24 percent share thanks largely to a $2.7 billion closing by Brazil-focused Sondas.

Sondas and Sweden’s EQT Infrastructure were the only two funds to close on more than $1 billion during the third quarter. EQT announced in July that it had collected €1.1 billion at the first close of its second infrastructure fund, which has a target of €1.5 billion.       

Probitas found that 16 funds had a closing of some kind in the third quarter, with six of these being final closes. Of these six, two raised less than their initial targets while one was a specific amount for a “small, pre-identified pool of assets”.

Expectations that some funds would pack up their fundraising efforts after fruitless time spent in the market are not borne out by the current figures. At the end of last year, Probitas reported 125 funds in the market – at the end of this year’s third quarter, this had risen to over 140. The total amount being targeted by these funds has remained steady at just under $90 billion.

Having reached a peak of $39.7 billion in 2007, before the global economic and financial crisis struck, infrastructure fundraising slumped to $10.7 billion in 2009. Since then, it has risen each year, with the $20.8 billion recorded last year edging ahead of the 2010 figure of $19.0 billion.

Last week, Global Infrastructure Partners, the New York-based manager, closed its second infrastructure fund – GIP II – on $8.25 billion. GIP II, the largest infrastructure fund ever raised, has been a major contributor to the global infrastructure fundraising total over the last couple of years.