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Laxman Pai, Opalesque Asia: Infrastructure dry powder, as a proportion of assets under management (AUM), hit a new historical low in 2024, said a study.
According to Preqin 2025 Global Report: Infrastructure, this AUM figure dropped 3%, or $38.5bn, over the first quarter of 2024 to 24%, compared with 35% at the end of 2020.
"Infrastructure has endured a prolonged slowdown in fundraising since the beginning of 2023, amid elevated interest rates. Additionally, the large amounts of capital raised in 2022 helped fulfill investors' allocation ambitions," the report said.
$70bn was raised by Q3 2024, showing a similar pace of fundraising to 2023 at $95bn over the year. In comparison, the preceding five years saw an average of $136bn being raised on an annual basis.
Preqin reported that North America-focused fundraising contributed to slower fundraising in 2024, and this may continue in 2025. The number of North America-focused funds closing per year fell from a peak of 63 in 2021 to 18 by Q3 2024.
Aggregate capital raised by those 18 funds was $20bn, 50% of the average $40bn raised by funds targeting the region over the first three-quarters of the preceding five years.
Looking at infrastructure deal-making, volumes remained slow. In 2024 to the end of Q3, there were 1,448 deals, or 96% of deal volume in 2023 (1,516) to the end of Q3. Preqin analysts note that anticipation of further rate cuts may be dragging on the market, as sellers hold out ...................... To view our full article Click here
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