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.
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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.
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