Over half of infrastructure funds that closed in 2014 exceeded their fundraising target, up from 37% of funds in 2013, according to Preqin.
However, the infrastructure fundraising market in 2014 saw a slight drop in total capital raised, from $44bn in 2013 to $38bn in 2014
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Yet the number of funds reaching a final close has seen a significant drop-off; 2013 saw 69 funds reach a final close compared to 42 funds in 2014.
As such, the average fund size has reached levels not seen since 2007, with the average fund closed in 2014 topping $1bn. Furthermore, Preqin’s latest research shows that 54% of infrastructure funds that reached a final close in 2014 exceeded their fundraising target.
This is up from 37% of funds that closed above target in 2013, and is the highest proportion since 2008. A further 6% of funds closed in 2014 met their fundraising target.
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By GlobalData- $25bn was raised by 19 North America-focused funds closing in 2014, up from 15 funds raising $18bn in 2013.
- Europe-focused fundraising saw a slight dip, with funds targeting the region raising $10bn in 2014 compared to $15bn in the previous year.
- The average fund closed in 2014 raised $1,013mn in capital, the highest average amount since 2007 when funds closed raised an average of $1,155mn.
- Funds closed in 2014 spent an average of 19 months to fundraise, a slight drop from 2013 when funds took an average of 20 months to reach a final close.
- A total of 144 infrastructure funds are currently seeking capital, targeting an aggregate $91bn. This is the same number and a similar aggregate target as January 2012, when 144 funds, the previous high, were seeking $93bn in capital commitments.
- Energy Capital Partners III was the largest infrastructure fund closed in 2014, raising just over $5bn.
- A reported total of $198bn was invested in 745 infrastructure deals in 2014, the highest amount of capital invested since the $251bn worth of deals in 2008.
Comment:
"While the number of infrastructure funds reaching a final close was lower in 2014 than in previous years, the amount of capital being committed to the asset class is still at strong levels.
"Funds that closed last year raised more on average than in any year, with the majority closing above their fundraising targets, reflecting continued strong investor demand for infrastructure.
"As we move into 2015, a large number of funds are in market seeking over $90bn in capital. Investors are still looking to commit significant levels of capital to the asset class, but managers must make a compelling investment case to attract capital.
"Investors are becoming far more sophisticated in how they invest in infrastructure, with many increasingly targeting direct investments or co-investments. While fundraising is likely to be strong in 2015, we expect that capital will continue to be concentrated into a small number of funds."
Andrew Moylan, Head of Real Assets Products
