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Alternative Market Briefing

Established fund managers dominate natural resources fundraising market

Friday, April 10, 2020

Laxman Pai, Opalesque Asia:

The global natural resources asset class has seen the best of times and the worst of times in 2019. Three months on and, if anything, the asset class faces even more challenges, said Preqin.

A new war of attrition within OPEC has sent oil prices spiraling below $30 a barrel, and the COVID-19 pandemic - with its huge impact on economic activity and transportation especially - has spawned an almost unprecedented level of market volatility.

"In 2019 we saw unlisted natural resources fundraising reaching new heights. And 2020 has so far continued this momentum, having secured more than $40bn, the highest amount is ever seen in a first quarter," said Preqin in its Quarterly Update: Natural Resources, Q1 2020.

That said, the number of funds responsible for this capital is very low, at just 22, meaning that established fund managers are dominating the fundraising market with the largest funds.

In fact, a single fund is responsible for half of the total capital secured in Q1 2020.

Brookfield InfrastructureFund IV raised $20bn and is looking to North America to deploy capital. This fund is also the second-largest natural resources fund ever closed, after Global Infrastructure Partners IV which closed on $22bn in December last year.

Energy-focused funds once again accounted for the majority of natural resources fundraising activity.

Fourteen of the 22 funds closed in Q1 2020 are energy funds, raising more than 85% of the to......................

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