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Laxman Pai, Opalesque Asia: The natural resources funds were the top performing asset class across
alternatives, posting a one-year rolling internal rate of return (IRR) of 34.6%
through Q1 2022, off the back of a strong commodities rally, said a study.
This is ahead of an IRR of 33% for real estate and 29.3% for private equity,
representing the highest level since Preqin began publishing the index for natural
resources in 2009, according to Preqin Global Report 2023: Natural Resources.
Fund managers with a focus on natural resources returned a record net
distribution of $22bn to investors for the year ending Q1 2022.
On a more granular level, pure natural resources funds raised $3.8bn by the end
of Q3 2022 despite exceptional returns, compared to $13bn raised in 2021.
Preqin analysts believe that 2022 could be the weakest year in over a decade for
pure natural resources fundraising, indicating investors' lack of interest in the
conventional energy industry compared to a growing appetite for exposure to the
energy transition and renewable energy investments, which is making new
investment opportunities possible.
In light of the strong distributions and weak fundraising, natural resources dry
powder has dropped to its lowest level as a share of assets under management
(AUM) since 2001, standing at 16% end of Q1 2022.
For energy-focused natural resources funds specifically, dry powder is down to
$25bn, the lowest level since 2012. This indicates th...................... To view our full article Click here
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