Santander confirms €1.5bn infra fund pull out

The Spanish banking group has said it will not be launching its Santander Infrastructure Fund II, confirming previous speculation that the fundraising was cancelled. It follows a number of other infrastructure funds to pull out of fundraising in what has proved a difficult fundraising environment.

Spanish banking group Santander has confirmed it is winding down a €1.5 billion infrastructure fund, becoming the latest fund to succumb to a difficult fundraising climate.

A Santander spokesperson said “we will no longer be launching a second infrastructure fund, Santander Infrastructure Fund II”, adding that the decision was “motivated by the current economic situation”.

Speculation during the summer had suggested that Santander was considering winding down the fund.

The spokesperson said Santander will continue to undertake infrastructure activity through its first infrastructure fund, Santander Infrastructure Fund I, which was launched in 2004.

Santander Infrastructure Fund II had a focus on European and Latin American investments, and was managed by the Madrid-based Santander Private Equity. The fund had made several investments,  including Chilean water utility and Aguas Nuevas and the joint-purchase of two Chilean road concessionaires with Spanish infrastructure developer Abertis.

Santander was one of the hardest-hit banks by Bernard Madoff’s fraud, losing around €2.3 billion of its clients money to the Ponzi scheme. The spokesperson did not comment on whether the scrapping of the fund was Madoff-related.

Infrastructure funds globally raised just $4.7 billion in the first half of the year, or about one-fifth their 2008 total, according to updated fundraising data recently provided by San Francisco-based placement agent Probitas Partners.

Other infrastructure funds to withdraw from the market this year include Bank of Ireland and ING Real Estate. RREEF Infrastructure also scaled down its US operations earlier this year.