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Laxman Pai, Opalesque Asia: Strong fundraising and AUM numbers, boosted by mega-infrastructure funds investing in energy, masked a challenging landscape for natural resources funds, said a study.
In 2019 natural resources assets under management (AUM) surpassed $760bn, a new record, according to Preqin Global Natural Resources Report.
And fundraising hit a high of $109bn, exceeding $100bn for the second year in a row. But these figures were bolstered by the closing of mega infrastructure funds that also invest in energy assets.
For natural resources and timberland fund types only, 2019 proved to be a challenging year.
The report said that the number of natural resources funds closed slid for the second straight year, dropping from 149 vehicles in 2018 to 128 in 2019, reflecting a tougher environment for fundraising in this asset class.
However, the performance also disappointed investors: the rolling one-year median net IRR to H1 2019 plummeted to a 10-year low of 1.5%. Amid volatility in commodity prices and rising geopolitical tensions, the industry struggled to gain momentum.
The rise of ESG, transitioning toward a low-carbon economy
Energy assets make up the lion's share of natural resources AUM.
As the global economy increasingly moves away from fossil fuels toward renewable sources of energy, investments in natural resources are shifting in this direction.
At the same time, the rise of ESG is driving growing investor i...................... To view our full article Click here
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