Fundraising by infrastructure-focused private equity funds has remained stubbornly low this year, but growing LP demand could yet fuel a rebound.
Infrastructure funds have raised just $77.8 billion across 56 vehicles globally, according to PitchBook data. Not only is this a significant drop from last year, when $118.1 billion was raised across 79 funds, but it is less than a third of the total number of closes in 2022 when $141.1 billion was raised across 177 vehicles.
The lackluster fundraising is despite a desire among LPs for greater exposure to infrastructure. Growing demand for digital infrastructure and the ongoing need for investment in energy transition are largely expected to drive investment in the sector over the long term.
Looking at European funds in isolation, the drop-off from the previous peak in 2021 looks more severe.
Infrastructure funds in the region raised $26.9 billion across 23 funds closed this year. This is only marginally down from last year’s full-year total of $28.1 billion, but a significant decline from 2021 when 80 funds raised a total of $78.7 billion in the region.
The global fundraising total could still see a significant change before the year is out. According to PitchBook’s Global Real Assets Report, a handful of large funds are still in the market. Among them are KKR Infrastructure Investors V, which has secured $11 billion and is targeting an eventual $20 billion close, and Brookfield’s Global Transition Fund II, which has already held a $10 billion first close.
Featured image by Ezra Bailey/Getty Images
Learn about our editorial standards.
