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Alternative Market Briefing

Infrastructure funds' investments in shipping growing larger, says Preqin

Thursday, June 20, 2019

Laxman Pai, Opalesque Asia:

Looking back at the development of the shipping-focused fundraising market in recent years reveals that managers have been closing fewer funds, but at record-high totals.

According to Preqin Insights, the infrastructure funds investing in the shipping industry have consistently secured aggregate commitments of over $30bn each year since 2016, owing in part to an increased number of fund closures at $1bn or more.

Prior to this, in 2015, four funds closed on more than $1bn each, the largest of which was the $2.3bn European Diversified Infrastructure Fund I.

In 2016, seven funds raised over $1bn, including a $14bn infrastructure core-plus fund, Brookfield Infrastructure Fund III. The largest fundraise of the past decade, Global Infrastructure Partners III raised $16bn in January 2017.

While 2018 did not see any double-digit billion-dollar closings, seven of the 13 funds investing in shipping raised over $1bn.

The Softbank Effect

Fewer funds raising huge amounts of capital - often referred to as 'The Softbank Effect' - is a trend not unique to infrastructure, having been observed in other private capital asset classes in recent years.

In the shipping sector, though, this trend is particularly pronounced: the average size of a fund investing in the shipping sector was $665mn in 2015, which more than tripled to $2.3bn in 2018.

Preqin data also shows that experienced infrastructure fund managers attra......................

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