Blackstone Groups record-setting infrastructure
investment fund may signal further concentration of such assets
in the hands of just a few asset managers.
While allocations to infrastructure investments are at
all-time highs, this capital is largely flowing to a small
group of large fund managers, according to a new report from data provider Preqin.
Blackstone, the worlds largest private-equity firm, announced May 20 that it was raising a $40
billion fund that may include a $20 billion anchor commitment
from the Public Investment Fund of Saudi Arabia.
Last year, three-quarters of the global capital raised by
unlisted infrastructure funds went to pools with $1.5 billion
or more in investor commitments up from 56 percent of
capital in 2015, and 48 percent in 2014, according to Preqin.
Such large funds already account for 76 percent of fundraising
Investors are tending to commit more capital to fewer
managers, so mega funds represent a greater proportion of
overall fundraising activity, said Tom Carr,
Preqins head of real assets products, in a statement
Friday. Investors may be attracted to the ability of the
largest fund managers to procure attractive deal opportunities,
as well as their proven track record in the asset
Morgan Stanley analysts called Blackstones new fund
with its staggering fundraising target a
paradigm shift for infrastructure investing. With
leverage, the private-equity firm said it expects to invest
more than $100 billion in primarily U.S. infrastructure
Blackstone sees a pivotal moment to raise $40 billion
of equity capital and invest in aging U.S.
infrastructure, the Morgan Stanley analysts said in a
The $40 billion target is more than twice the size of any
previous infrastructure pools, according to Preqin. The $20
billion anchor commitment from Saudi Arabias Public
Investment Fund would be the largest single contribution by any
investor to an infrastructure fund.
The scale of many modern infrastructure projects
allows investors to deploy significant amounts of
capital, Carr said.
Preqin currently tracks 86 infrastructure funds that have
closed with more than $1.5 billion of investor commitments. As
a group, these funds raised $279 billion.
Global Infrastructure Partners third eponymous pool
was the largest fund closed since January 2016, with $15.8
billion in assets, the Preqin report shows. Close behind is
Brookfield Infrastructure Fund III, which closed in July of
last year after raising $14 billion.