Chart of the week: Infrastructure debt market expands

Managers of closed-ended infrastructure debt vehicles raise more in response to investor appetite.

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Infrastructure debt funds have risen in popularity among investors in recent years. Pension funds and insurers, in particular, have been attracted by long-term cashflows and the potential for higher rates of return compared with low-fixed income yields.

PDI’s Research & Analytics team have analysed how investor appetite has affected fundraising by infrastructure debt fund managers since 2010.

Macquarie Group is the largest fund manager of closed-ended infrastructure debt vehicles – based on aggregate capital raised over the past six years – gathering $4.57 billion from the close of three funds.

Total capital raised by the top five managers has generally increased year-on-year. In 2013, BlackRock collected $428 million from the close of a number of infrastructure debt focused separate accounts, compared with $2.8 billion for its 2015 separate accounts. Likewise, capital gathered by Sciens Capital Management and AMP Capital increased between first and last fundraise by $620 million and $660 million respectively.

As the China Communication Construction Company (CCCC) only raised one vehicle over the period, it is an exception to this rule. CCCC-NSSF Infrastructure Fund collected $2.29 billion at final close in November 2015.

The amount gathered by Macquarie in 2015 was around $2 billion less than the amount amassed by the firm a year earlier. However, this was primarily due to the fact that 2014’s fundraise related to the firm’s largest ever infrastructure debt vehicle, while capital raised in 2015 is attributed to a separate account alongside SwissRe.