Global infrastructure fund raising is likely to remain tough in 2012 despite the private infrastructure market last year witnessing consistency in terms of deal flow and fund raising, a report by data firm Preqin said.
As many as 38 infrastructure funds closed during 2011 raised a combined $16 billion, significantly less than the $31.8 billion that was raised by the 41 funds that closed in 2010.
However, the year 2011 has proved to be a "consistent" year for infrastructure deals as 226 such funds were completed during the course of the year. But going forward fund raising will remain tough this year, Preqin says.
"...Infrastructure deal flow continues to steadily improve despite ongoing issues with regard to availability of affordable long-term debt financing," Elliot Bradbrook – Manager, Infrastructure Data, Preqin said.
The fourth quarter was the strongest quarter for fund raising as half of the annual total was raised in the last three months of the year as seven funds closed the quarter having raised a combined $8 billion.
"Although fund raising did not reach the levels seen in 2010, the majority of capital raised in 2011 was fresh capital [not secured prior to the downturn], showing that institutional investors are still looking to make new commitments to unlisted infrastructure funds.
A further $13.1 billion was also raised by funds holding interim closes in 2011, which shows good momentum within the current market.
"Despite this, infrastructure fund raising will remain tough in the coming year and only those managers offering the most attractive opportunities will be successful," Bradbrook said.