Infrastructure Fundraising Bounced Back in 2021’s First Half

Jul 22, 2021 | News

Investors are pouring money into infrastructure funds, which are on the rebound after proving their resiliency during last year’s pandemic-related downturn.

In the first six months of 2021, $54.8bn was raised globally for infrastructure deals, with $31.8bn of that in the second quarter. The total amount raised roughly matched the first half of last year, but the 2021 second-quarter sum is about 88% higher than the same period a year earlier.

After slowing fundraising a year ago, the Covid-19 pandemic is now spurring fresh interest in infrastructure funds. These vehicles – which invest in a range of assets including roads, airports, utilities and pipelines – generally lived up to their promise of lower returns, but also lower risk, than other alternative assets during the pandemic, infrastructure investment experts say.

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“Covid was probably the first big test of the infrastructure asset class since its development. And as an asset class, in the minds of [limited partners], it has stood up pretty well,” said Gordon Bajnai, global head of infrastructure for private-capital adviser Campbell Lutyens & Co., which helps asset managers raise capital.

The performance of different types of infrastructure assets was uneven, however. Traditional so-called core infrastructure assets—developed, cash-flow-yielding assets such as utilities—performed strongly, as did those in hot sectors like digital infrastructure and renewable energy. Investments that performed less well include those tied to oil and gas as well as certain types of transportation assets, such as airports.

Source: Wall Street Journal

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