The number of unlisted infrastructure funds being marketed to investors at the start of 2016 is at a record 181, up 25 per cent from the 145 funds being marketed at the start of 2015, according to figures released by Preqin.
These funds are targeting a combined USD125 billion, which represents an increase of 37 per cent on the USD91 billion being targeted at the start of last year. Two funds, Brookfield Infrastructure Fund III and Global Infrastructure Partners III, are targeting USD12.5 billion each. If they meet those targets at close, they will be the largest unlisted infrastructure funds ever.
Eighteen Europe-focused unlisted infrastructure funds raised an aggregate of USD14.2 billion, compared with USD13 billion raised by 11 North America-focused funds. Seventeen funds targeting the rest of the world saw USD7.9 billion of investor commitments.
Forty per cent of infrastructure funds closed in 2015 exceeded their fundraising targets, down from 44 per cent in 2014. However, the proportion of funds that failed to reach their targets also fell, from 49 per cent in 2014 to 37 per cent in 2015.
The average size of funds closed in 2015 hit a record high, at USD858 million. This is the fourth consecutive year in which the average fund size has risen, 77 per cent more than the USD484 million average size for funds closed in 2011.
Both the number of funds closed in 2015, and the aggregate capital raised by those funds, failed to meet the levels seen in 2014. Forty-six unlisted infrastructure funds secured a combined USD36 billion in investor commitments through 2015, down 22 per cent and 12 per cent respectively from the 59 funds which raised a total of USD41 billion the previous year.
“The unlisted infrastructure market in 2015 did not reach the record rate of fundraising seen in 2013 or match 2014, with annual declines in both the number of funds reaching a final close and the aggregate capital raised. Fundraising totals are now returning to the levels seen in 2010 – 2012,” says Andrew Moylan (pictured), head of real assets products at Preqin. “However, the fundraising market is becoming more competitive, with more funds being marketed, targeting higher levels of capital. Some firms achieved considerable success in the fundraising market in 2015, and there are likely to be further large fundraises in 2016, but for many firms fundraising is likely to remain a long and difficult process.”