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Alternative Market Briefing

Outlook for real assets looks more bullish: 71 funds raised $81.7bn YTD

Monday, November 29, 2021

Laxman Pai, Opalesque Asia:

The outlook for real assets is more bullish than it has been in years with 71 funds raising a combined $81.7 billion YTD, said a study.

According to a PitchBook report, fundraising this year till 3Q has been notably dominated by a smaller number of large infrastructure funds from Copenhagen Infrastructure Partners, Macquarie Asset Management, BlackRock, KKR, and EQT.

"This is partially because infrastructure funds, which tend to be larger by necessity, are receiving more LP demand than oil & gas and other real assets funds," the report said.

Concerns that the current inflationary environment may endure are prompting many LPs to look to real assets funds as an inflation hedge in their portfolios. Infrastructure managers continue to attract capital by delivering reliable fund returns in the region of 10%.

At the same time, natural resources and oil & gas funds may be approaching a significant turning point as commodity prices soar. The real question is: How long will the bull run last, and will it be enough to entice both GPs and LPs back into strategies that have underperformed for so long?

Although the fundraising figures through Q3 2021 are less stunning than those of other strategies such as private equity (PE) and venture capital (VC), the outlook for the real assets space looks more bullish than it has in years.

On the one hand, infrastructure funds have posted reliable returns in the region of 10% for years du......................

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