Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013

21698

Infrastructure fundraising market dominated by USD1bn Club investors and fund managers

RELATED TOPICS​

The USD1bn Club of infrastructure investors, a group of 69 institutional investors that have allocated USD1 billion or more to the asset class, have become dominant players in the infrastucture fundraising market, according to research by Preqin.

More than two-thirds (69 per cent) of the USD1bn Club have a separate infrastructure allocation, compared to 34 per cent of smaller investors. USD1bn Club investors also have an average allocation to infrastructure of 7.0 per cent of total AUM, compared to 3.3 per cent for their smaller counterparts.
 
This level of resource and experience allows them greater access to the market through direct investments, and 82 per cent of USD1bn Club investors invest directly into infrastructure assets, compared to 31 per cent of other investors.
 
As much as these largest investors are able to exert their influence on the industry, the largest managers continue to dominate the fundraising market, accounting for an ever-larger proportion of total investor capital raised.
 
Preqin currently tracks 84 unlisted infrastructure firms globally which have raised more than USD1 billion in the last 10 years, which collectively account for USD320 billion, or 85 per cent, of investor commitments since 2006. Of these, just six fund managers have raised more than USD10 billion, and collectively account for USD108 billion, 29 per cent of capital raised in the period, an indication that even within this largest class of fund managers there is an increasing stratification by size.
 
Six of the 10 largest allocators to infrastructure are headquartered in Canada, and hold a combined AUM of approximately USD59 billion, 19 per cent of the USD1bn Club’s allocation to infrastructure. Eleven of the entire USD1bn Club are located in Canada, while 14 are located in Australia and 12 in the UK.
 
Public pension funds account for the largest proportion (23 per cent) of any investor type in the USD1bn Club, slightly more numerous than asset managers (21 per cent). Sovereign wealth funds represent 8 per cent of the USD1bn Club, with approximately USD15 billion allocated to infrastructure, often supporting domestic projects.
 
USD1bn Club infrastructure investors will have a significant influence on the success of first- time fund managers by acting as cornerstone investors; 77 per cent of the largest allocators will invest or consider investing in first-time funds, compared with 55 per cent of all other infrastructure investors.
 
Although the largest fund managers tend to be those which have the most established track record, 80 per cent of managers who have raised USD1 billion to USD2.4 billion have raised just one to two funds previously. This falls to 17 per cent among fund managers which have raised USD10 billion, of which 33 per cent have raised five funds or more.
 
Of the 84 members of the USD1 billion Club of fund managers, 38 per cent are based in North America and 39 per cent in Europe. London is the biggest hub for these managers, and is the location for 18 firms which have collectively raised USD67.3 billion over the past 10 years.



“The increased resources, both human and financial, that the members of the USD1bn Club of investors can bring to bear on the industry allow them to take a more tailored approach to the infrastructure market,” says Tom Carr, head of real assets products, Preqin. “The high proportion of investors choosing to directly invest in projects is indicative of their size, and their greater experience allows them to rely less on the expertise of fund managers to identify attractive investment opportunities.

“It is likely that USD1bn Club investors will see further growth in their number over the coming years, as many large investors which do not currently qualify are below their target allocations to the asset class, and so may increase their commitments above the threshold in order to meet their objectives. As more investors join this group of the largest infrastructure investors, its members are increasingly becoming dominant participants in the infrastructure market.” 

Latest News

Irish domiciled funds surpassed EUR4.3 trillion AuM (Assets under Management) at end-March 2024, a 15..
New analysis by London-based Nickel Digital Asset Management reveals 38 listed companies with a combined..
Bloomberg has announced that for the first time, its proprietary Bloomberg Second Measure (BSM) transaction..

Related Articles

Global ESG Investing
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of climate change and ESG factors in state policymaking...
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of..
Trends
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100 million deals announced this month alone...
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100..
Different flavours
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led, multi-boutique global asset manager with over USD20 billion under management, recently undertook a survey with 204 UK investment professionals, seeking insights into their perceptions and attitudes towards boutique asset managers...
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led,..
UK map
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be worth billions of pounds in the coming years...
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by