Research - JULY 20, 2017

Less than $3 billion raised by infra funds reaching final close Q2/17

by Denise DeChaine

Infrastructure funds closing in the first half of 2017 raised $33.8 billion. This is significantly more than the $22.0 billion raised in the first half of 2016. The real difference, however, is not so much in the total raised, but in how it was raised. In 2017, one fund — the $15.8 billion Global Infrastructure Partners III — accounted for 47 percent of all capital raised. In 2016, it took six funds, or 42 percent of the 14 funds that closed, to reach that 47 percent. Fourteen funds also closed in the first half of 2017, so that one fund represents only 7 percent of those funds.

The second quarters of 2016 and 2017 saw a significant fall off of capital raising when compared to the first quarters of each year. But the second quarter of 2016 saw twice as much capital raised as the second quarter 2017 — $5.9 billion versus $2.9 billion.

During 2015 and 2016, 62 percent and 56 percent of the year’s total was raised in the first half, respectively. If we use these two numbers for the top and bottom of a range to estimate how much capital will be raised by the end of 2017, we come up with a prediction of $54.5 billion to $60.3 billion. This range puts us pretty much in the same ballpark as the past two years, when $61.6 billion was raised in 2015, and $56.4 was raised in 2016.

Whether 2017 reaches or surpasses the totals of 2015 and 2016 will depend on the mega-funds — those funds that raise $2 billion or more. In 2017, 82 percent of the capital raised by funds closing in the first half has been committed to one of these large funds. In the first half of 2015 and 2016, 61 percent and 69 percent of the capital raised, respectively, was by mega-funds.


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