During the past four years, the percentage of infrastructure debt funds versus equity funds reaching a final close has seen its ups and downs, according to data from Institutional Real Estate, Inc.’s FundTracker. First it crept up from 8.8 percent in 2014 to 16.0 percent in 2016. The number of debt funds then fell in 2017, to just 6.7 percent of the total. Year-to-date 2018, 8.3 percent of the infrastructure funds reaching a final close have been focused on debt, according to Institutional Real Estate FundTracker.
The percentage of capital raised by these funds has followed a similar pattern — starting at 7.2 percent in 2014, rising to 7.3 percent in 2015 and then 8.4 percent in 2016. The market then turned, with only 5.0 percent of the capital raised in 2017 going to debt funds, and only 3.2 percent so far in 2018.
Debt funds are struggling to keep up with their more robust equity brethren when it comes to average size. Although the average size has gone up and down over the years, debt funds have consistently come in smaller, on average, than equity funds.
We have long noted that infrastructure capital is being concentrated in the hands of a few mega-managers. But not debt funds. Ten different managers were responsible for the 11 infrastructure debt funds that closed since 2015. Only Macquarie saw more than one fund close.
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