Global Infrastructure Fundraising Rises in Q1

AMSTERDAM (Reuters) – More capital has been raised from investors by unlisted infrastructure funds reaching final close so far in 2010 than was raised throughout the whole of 2009, according to data by market research firm Preqin.

Nine infrastructure funds have reached final close in 2010 to date raising $11.7 billion, surpassing the 7 billion euros ($9.4 billion) raised in 2009, though the figures were boosted by major funds, fundraising for two years on average, finally closing in 2010.

Global infrastructure fundraising dried up in 2009 as institutional investors, such as pension funds and insurance firms, moved into more liquid assets, while increased competition for investors’ money has exerted pressure on fees.

As a result the number of such funds persisting with their fundraising is now dropping following a peak at the start of the fourth quarter of 2009, when a record-breaking 104 funds targeted $106.8 billion in investor commitments, Preqin said.

“The first four months of 2010 indicate that infrastructure fundraising for the year will be much stronger than 2009,” said Preqin data manager Richard Stus.

“However, although investor confidence is gradually returning, fundraising conditions for fund managers will remain tough as investors exercise heightened caution before making fund commitments.”

Independent U.S. asset manager Alinda Capital Partners closed its second $4.1 billion infrastructure fund in January in the biggest infrastructure fundraising since the collapse of Lehman Brothers in September 2008.

Goldman Sachs (GS.N) closed this week its second infrastructure fund at $3.1 billion, Preqin said. People familiar with the matter told Reuters in March that Goldman was forced to cut its fundraising target from $7.5 billion after failing to secure enough commitments.

Other funds that reached final close so far in 2010 include JPMorgan’s (JPM.N) $858 billion Asian Infrastructure & Related Resources Opportunity Fund and the $1.6 billion Macquarie (MQG.AX) Infrastructure Partners II, Preqin said.

Infrastructure funds invest in assets such as roads, airports and power grids. In the first quarter of 2010, fund managers reported 28 deals involving such assets, a drop from the 41 deals in the first quarter of 2009, Preqin said.

This indicates it is still difficult to secure the debt in the credit markets that is needed for those deals, Preqin said.

By Greg Roumeliotis
(Editing by David Holmes) ($1=.7439 Euro)