LPs & fundraising: preparing for a tougher investing environment
Fundraising globally by infrastructure funds slowed dramatically in the third quarter of 2022, falling to just USD 12bn, according to Infralogic data. The drop off followed record fundraising in the first half of the year when USD 122bn was raised. The abrupt halt raises the question of whether the market is simply taking a breather or if fund managers need to prepare for a much tougher environment in 2023.
Total annual capital raised at final close reached a new record of USD 148.75bn accumulated by 59 infrastructure, renewables and energy transition funds in 2022 globally, beating the last record of USD 103bn raised by 54 funds in 2021. GPs and funds have been once again the main investors in the US and Canadian markets in 2022, by a larger margin than the previous year.
- What types of funds are LPs galivanting towards?
- How are LPs looking at energy funds compared to more general infrastructure funds?
- How much of an impact does the so-called denominator effect have on fundraising? Are some LPs willing to exceed allocation caps?
- Several GPs executed secondary deals in 2022 to hold onto assets longer. Are LPs open to more GP-led secondary transactions?
- Are there any openings for new GPs to raise inaugural funds?
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