North America’s infrastructure investors are “well-placed” to take part in President Donald Trump’s U.S. infrastructure plan, after a second straight year of record fundraising, according to Preqin.
The alternatives data provider said in a report Friday that funds attracted an unprecedented $35 billion in North American infrastructure commitments last year, more than half of the global total and surpassing the previous record of $33 billion in 2016. Deal activity also picked up among North American infrastructure funds, with 862 deals totaling $129 billion announced last year. That's an increase from 807 transactions amounting to $123 billion in 2016.
The surge in activity in North America came as investors anticipated a new government-sponsored infrastructure plan from the White House. The initial framework, unveiled February 12, called for $1.5 trillion of infrastructure investment over the next decade, but only committed $20 billion of federal funding.
Preqin’s real assets head Tom Carr sees the private sector “taking the lead” in providing funding for new and renewed infrastructure in the U.S.
“The infrastructure industry in the region is well-placed to respond,” he said in the Preqin statement. “Record fundraising and deal activity speaks to an energized fund manager universe, and sizeable investor interest.”
Carr cited Blackstone’s mega infrastructure fund, the largest ever open-ended pool focused on the industry with a $40 billion target, as evidence of asset managers looking to capitalize on infrastructure opportunities promoted by the Trump administration.
[II Deep Dive: Blackstone Plans $100 Billion U.S. Infrastructure Program]
Sixty-nine percent of investors surveyed by Preqin said they believed North America would offer the best infrastructure opportunities this year. Still, there may be a priority mismatch between the U.S. government and private investors, with Carr saying that 2017 infrastructure deals focused on social and energy infrastructure projects that are “easily monetized” to give investors a revenue stream.
“Other projects such as roads, bridges and tunnels are harder to make attractive for private investors,” he said in the statement. “Careful attention must be paid to the financial and regulatory framework used to make these kinds of projects viable.”