South America-based fund managers active in the region raised 67% of capital garnered by South America-focused funds in 2010-2013, an increase of 28 percentage points compared to the proportion of aggregate capital that was accounted for by domestic fund managers in 2006-2009, according to Preqin’s latest edition of Infrastructure Spotlight.
As a consequence, fund managers based outside of South America have declined in prominence in the region, having raised only 31%(US$1.3 billion) of capital for funds targeting the region in 2010-2013, compared to 61% (US$2.5 billion) in 2006-2009, the report suggests.
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The report added that domestic fund managers make up the majority of firms active in South America (60%) and 57% of funds on the road focusing on investments in the region are managed by South America-based firms.
The authors of the report opined that the success of local fund managers may in part be due to domestic investors showing confidence in the region, many of which have significant assets under management. South America-based infrastructure investors targeting the region have average assets under management (AUM) of US$41 billion, compared to all infrastructure investors which have an average AUM of $39 billion.
The report found that there are 14 unlisted infrastructure funds on the road targeting the region, seeking an aggregate $6 billion.
Elliot Bradbrook, manager of infrastructure data, said: "In recent years there has been a general increase in domestic managers raising private infrastructure funds targeting the region, with 57% of South America-focused infrastructure funds currently on the road being managed by South America-based firms. This underscores the current uptake of a privately financed infrastructure investment market by domestic investors.
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By GlobalData"However, foreign fund managers have also been quick to recognize the potential for investment in South America. Funds raised by managers based outside of South America accounted for $5.2 billion of the $10 billion raised targeting the region historically, and $2 billion of the capital being sought."
