Renewables flex their muscles in H1 fundraising

It was always going to be interesting to examine 2021’s half-yearly fundraising data. After all, fundraising for closed-end, unlisted infrastructure funds held up pretty well in 2020, dipping by only 15 percent compared with 2019, and notwithstanding the unprecedented global challenge mounted by the pandemic.

So, we were keen to see if our H1 data offered any indication whether 2021 might be set for a bounceback to 2019 levels. The short answer? It might very well be, given the close to $57 billion raised as of 1 July and the more than $84 billion sought by the top 10 funds in market. The latter include the latest flagships by the likes of EQT, KKR, I Squared Capital and Stonepeak Infrastructure Partners, many of which are due to reach a final close imminently.

You’ll get the full details soon when we publish our H1 2021 fundraising report. But what’s equally interesting about this half-yearly fundraise is how strongly renewables funds feature in it – a trend that had already become apparent in our Q1 figures. More than 33 percent – or about $19 billion – of the $57 billion raised in the first half of the year was amassed by dedicated renewables strategies. When we look at the totality of sector-focused fundraising – which amounted to $27.7 billion in H1 – renewables simply dominate, accounting for a whopping 69 percent of it.

Perhaps unsurprisingly, the two biggest vehicles to close in H1 – the €7 billion Copenhagen Infrastructure Partners IV and the $4.8 billion BlackRock Global Renewable Power Fund III – are renewables-focused.

To get a sense of how much has changed over the last year, in H1 2020 only 8 percent of sector-specific fundraising was made up of dedicated renewables strategies (compared with 69 percent in H1 2021). What’s more, out of the $61.6 billion raised during the first half of 2020, only about $1 billion was made up of dedicated renewables strategies (versus $19 billion of the $57 billion raised in H1 2021).

The key word here is ‘dedicated’. In H1 2020, $14.7bn of the $61.6 billion raised comprised strategies targeting both traditional energy and renewable assets – with an extra $1 billion dedicated solely to renewables. Fast-forward 12 months and the picture has completely flipped, with only $1.1 billion of the $57 billion raised in H1 2021 made up of strategies targeting traditional and renewables assets – with a further $19 billion focused solely on renewables.

Is anyone really surprised, given renewables and the wider energy transition were one of 2020’s success stories, the proliferation of net-zero pledges and government plans to ‘build back better’? Probably not.

Still, as the infrastructure fundraising juggernaut powers back fully, it’s comforting to know there’s a lot of green in the tank.