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Laxman Pai, Opalesque Asia: The natural resources fundraising maintained near-record levels in Q2 2022, on the back of sustained tightness across many commodities markets and stellar returns in 2021, said a study.
According to Q2 2022 Natural Resources Report by Preqin, 451 natural resources funds were looking to raise a total of $214bn during the quarter.
Natural resources fund managers raised $51bn across 25 fund closures, only slightly less than the record $60bn raised in Q1 2022, the study revealed.
Nearly all of this ($50.5bn) was raised by energy-focused funds, while the remaining $0.5bn was allocated to agriculture and farmland funds.
"Geopolitical risks and supply disruptions caused by the Russian invasion of Ukraine are likely to have a long-lasting impact on the broader commodities markets, and the current supply deficit, particularly in energy markets, is likely to last for years. This presents natural resources funds and investors with an exceptional opportunity to ride this super cycle more confidently than previous ones," the report pointed out.
Natural resources' one-year internal rate of return (IRR) figures for the period ending December 2021 stand at 34.5%, which is only 0.3 percentage points below that of private equity.
Meanwhile, cash flow has turned positive for the first time in two decades, as natural resources funds returned $14.8bn of cash to investors in the first half of 2022.
For natural resources, the dry powder...................... To view our full article Click here
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