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U.S. Infrastructure Investment Soars, Private Real Estate Fundraising Lags

Investors are putting their money into U.S. infrastructure at an accelerating pace as of the third quarter, while private real estate fundraising efforts have slowed.


After a slow Q1, infrastructure fundraising has accelerated, with Q3 seeing 20 funds secure $37B, according to Preqin data

That is the most capital raised for infrastructure investments in any quarter, surpassing the previous record set in Q1 2017, when 22 funds raised $32B.

Moreover, the average size of infrastructure funds closed in 2018 year to date has jumped to $1.5B, a significant increase from $895M in 2017, Preqin reports. The largest proportion (41%) of funds closed so far in 2018 reached 125% or more of their initial target, while just 15% failed to meet their target.

The totals are expected to grow more, since the latest numbers don't include the $5B raised thus far by Blackstone Group in the initial phase of its planned $40B infrastructure fund, the Wall Street Journal reports.

Also, two major infrastructure players, Global Infrastructure Partners and Brookfield Infrastructure Partners, which in 2016 raised $15.8B and $14B funds, respectively, are targeting new pools of roughly $20B each.

By contrast, closed-end private real estate fundraising slowed for a second successive quarter in Q3, as 53 funds held a final close, securing a total of $24B. 

Although Preqin expects these figures to rise by up to 10%, this still marks a slowdown from Q2, when 74 funds secured $32B. 

Even so, a fair number of deep-pocketed investors remain in play in the real estate space. The largest fund closed in Q3 was Carlyle Realty Partners VIII, which secured $5.5B.