Infra Fundraising Records
I’ve seen in the news some massive infrastructure funds raised the past couple weeks with the latest being today’s announcement of GIP raising a record $25bn. That along with Stonepeak’s $14bn last week and Blackstone’s additional $7bn makes me curious, how does this effect the market? Does all this dry powder start to go towards bidding wars and we see inflated asset prices? Were these massive fund sizes expected? Are they expected to get even bigger?
Don’t work in PE or infra so I’d be curious to hear some of the PE veterans opinions on this.
Thanks.
To your first question, short answer is yes. Returns across the infra spectrum have come down (similar to broader PE) and the proliferation of evergreen funds with no time horizon in conjunction with increased broader competition have basically precluded a lot of the big infra guys from chasing traditional core and core plus assets. Basically if there isn't some heavy development risk or other type of hair associated with the asset, it's really hard to be successful IMO. I spent time at one of the big infra players and we were chasing all sorts of riskier/speculative stuff (some of which was arguably not even infra).
I think it's been really easy to raise these funds just given increased LP allocations to PE as an asset class + the amount of interest in renewables. I do think there are pockets of infra that may still be untapped like hydrogen fuel but very curious to see where capital is deployed over the next 5 years.
Thanks for the response. Are those pockets you mentioned mostly targeted by the core plus/value-add investors? That makes intuitive sense to me since the technology isn’t proven and the bank and capital markets wouldn’t be as comfortable but again, don’t work in infra or PE.
I wouldn’t even call those pockets core plus, more like value-add/opportunistic. Interesting that GIP raised a dedicated core vehicle because I know that they’ve historically done those core/core plus deals through ad-hoc side vehicles outside of any large fund.
Interesting timing of this thread as GIP announced targeting a new $25bn flagship fund with another $5bn fund specifically focused on lower return core assets.
Eum officiis consequatur optio sint deleniti adipisci. Hic explicabo blanditiis voluptas placeat. Eum suscipit veritatis quibusdam illum dolor. Et omnis sed voluptatibus enim praesentium reprehenderit laboriosam. Neque consectetur quis reiciendis blanditiis quibusdam quidem provident.
Inventore qui ut rerum cumque dolor illum. Facilis ab aperiam sit est eveniet eligendi sunt. Est omnis quae deserunt ipsa distinctio a in.
Ex autem numquam ut corrupti ex sed qui. Voluptatem rerum sit aut eius. Quia nulla debitis est. Sapiente voluptate ad iure. Distinctio eius eius eveniet in.
Consequuntur quia quia itaque ducimus dolores sunt libero. Id vitae reiciendis consequatur eum quisquam maiores ex.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Ut voluptate error repudiandae et libero eligendi eius. Iste eaque et quidem unde omnis repudiandae sed. Cumque autem laborum recusandae. Laudantium molestias sed neque ab.
Doloribus dicta facere odit sit reiciendis soluta nostrum. Qui illum sunt incidunt qui aperiam. Nobis voluptas dolor beatae corporis soluta. Occaecati ut et amet quos aut.