Speaker 1Hi, I'm Bruno Alves, Editor-in-Chief of Infrastructure Investor, and welcome to the Infrastructure Investor Podcast. In today's episode, I sit down with America's editor, Zach Bentley, to talk about the fundraising performance of the asset class during the first nine months of the year. With $200 billion raised for unlisted, closed-end structures, this is already the best fundraising tally of the past five years, beating 2021 and 2022, the high watermarks of the asset class. It's also the first time that infrastructure fundraising has hit the $200 billion milestone. Given there's still one quarter to go, Zach and I unpack what final figures for 2025 could look like, the impact time on the road is having in making 2025 a standout year, where the next generation of funds can come from, LP appetite, and much more. Hi, Zach, welcome to the podcast. Hi, Bruno, good to be here. Yeah, good to see you. It's fundraising report time. We have just released our Q3 2025 fundraising figures for unlisted, closed-end structures. And kind of a funny thing happened. I think we, last time we did one of these fundraising podcasts, we had posited that, that we could end up in a place where 2025 was actually one of the best fundraising years ever, and we certainly raised the possibility it could even become the best fundraising year ever. I have to say, I wasn't quite expecting it, that by Q3, we would already get to that place. But that is where we find ourselves now. So just to very quickly frame the headline figures for our listeners, we've recorded a total of $200 billion raised in unlisted, closed-end structures, closed-end structures, raised in Q1, Q3 for unlisted, closed-end structures. So that includes circa 66 billion closed in Q3 alone. Of those 66 billion, a 20 billion chunk is actually Brookfield's second energy transition fund, which closed just as we were putting the finishing touches on this report. And so here we are 2025 with one quarter to go is already the best fundraising year ever. So what do we do, Zach? Do we get the party banners out or do you want to pour cold water all over some of this
Speaker 2stuff? Well, listeners, that sound you hear is gold coins bouncing off the floor. The glory years are back. Yeah, we're back. Yeah. It's slightly strange looking at our figures and reading it like this. Anyone looking at those numbers on a surface level would just think that infrastructure fundraising is off the scales and it's a goldmine for managers out there. It's a kind of strange experience. I think anyone listening to this podcast, whether it's a GP or an LP or someone else, might have a rather more nuanced view of all of that. We're certainly not still in '23 or '24, but there's still plenty of fundraising difficulties out there for managers. It's not as smooth sailing as it was 2019 to 2022, but that's not what the numbers say. That's not what the facts say.
Speaker 1Yeah. And just to keep on this for a little bit longer. Yeah. Since we published, which was just a few days ago at the time of recording this podcast, and to be precise, we published our report on the 7th of October. But since then, we already have about just shy of 10 billion added to that 200 billion total thanks to announcements of the close of Manulife's latest flagship on 5.5 billion, the close of ARIE's latest secondaries infrastructure strategy on 3.3 billion. We have the imminent close of Ardian Infrastructure 6, which may be by the end of 2021, but we're still in the early stages of that. Yeah. So maybe by the time you're listening to this podcast as already closed, north of $12 billion, so we're just back of the napkin. We're already nearing 220 billion, which is, again, quite something. But as you say, you speak to people and this is not quite the feeling. So we're talking about time on the road, aren't we? And a confluence of longstanding fund closes finally coming to a head and producing this kind of spectacular. Yeah. Yeah. Yeah. year, isn't it?
Speaker 2Yeah, preparing for this podcast, I went back to our full year 2022 fundraising report. And as you can see in our 2025 fundraising report, we always have at the end the 10 largest funds in market. The 10 largest funds in market in January 2023, 40% of those closed this year. So I think that gives you a kind of insight into what we're dealing with here. It's not the case for everyone, but a lot of the booming success that these numbers shout at is more 2023 processes coming to an end.
Speaker 1Yeah. Yeah. And it's really interesting you say that because I also, I did a few back of the envelope calculations before coming on. And if you look at the top 10 funds closed in Q1 to Q3, and collectively they amount to 115 billion. So just a little bit more than that. So I think that's a little bit more than that.
Speaker 2and which is maybe more adjacent to the renewable space than the other two are yeah there's there's a lot of larger funds taking up the air time here so i don't know necessarily that we're looking at a wave of renewable fund closes and we also had the macquarie m gets fund which which closed recently and that was more of a a fund where the bulk of the capital was raised in the 2023 zone so i don't know that we've got a wave of renewables funds coming along i think one one fund that is maybe interesting to look at from this year's figures is the excelsior renewable energy fund too that closed on a billion in april so i think a u.s renewables fund closing in april going above target has done pretty well for itself there
Speaker 1no absolutely i think but from a product point of view and there's a lot of question marks what i'm wondering is what's going to happen in the future and what's going to happen in the future and i'm wondering is if we are going to get to a place in the future where we're going to have a similar momentum with data center or digital focused funds and one of the biggest ai ones is is obviously the gip one which is in the works and that's going to be open-ended so it's going to unfortunately fall off our kind of fundraising reports there is something in the works from brookfield i don't think we quite know if that's a closed end or open-ended initiative but it does feel to me like it's the next wave of product is going to be open-ended so i think that's a going to focus on this space right i
Speaker 2think there there's a question of just how many people can play in that part of the market you know you mentioned larger players like gip and brookfield and we've seen the blue hour guys formerly of ipi do very well in some very large transactions this year as well and closing a seven billion fund but i don't know that there's room for everyone to kind of play into that ai market although i would caveat that we've sort of speaking digital infrastructure not just ai data centers we did have nova cap from canada this year which closed on one billion and showed both room for mid-market and first-time fund manager successes in this space still and of
Speaker 1course the other kind of counter to some of this is it's true in in that large scale space you will have a finite number of players just by necessity it is clear that they are going to try and go for very large amounts of capital one of the things i think brookfield has pulled off very successfully over the last few years with its energy transition series is actually scale up downingly quick in a way that took years for their traditional flagship uh funds to to achieve basically and so it's going to be really interesting if these large-scale players are going to come with with huge funds and if they can pull it off then we are you know we're going to be in a different
Speaker 2place also yeah yeah that's very much a kind of wait and see and also let's see how how many legs there are in in the ai race and where all these projections
Speaker 1bottom out no absolutely what else caught your eye about the fundraising figures zach anything else we interested in bringing up i think we we
Speaker 2slightly alluded to it before when you mentioned the aries fund sort of with q1 to q3 figures we've got secondaries making up four percent of the total infrastructure fundraising we have had this figure in one or two years beforehand but those are four-year fundraising figures so we still got some road on this but there's been some really interesting secondaries funds closing you mentioned aries uh raising 3.3 above a 2 billion target blackstone raised 5.5 billion earlier this year we've had maybe some lower end of the scale closes from harbour vest and macquarie both which were a bit below target but they are displaying a strong appetite for infrastructure secondaries
Speaker 1fundraising overall yeah that's true that is one of the the promising bright spots isn't it and
Speaker 2i think we've had uh we've had the first close of brookfield's debt fund recently from healthy debt fundraisers this year as well sort of private credit having its moment as well so there's definitely a lot of interesting things to look at beyond the headline numbers yeah and also i mean
Speaker 1despite our comments on on time on the road and what is driven this this particular search i think it's a genuine momentum in the sense that i feel at least that there is good lp appetite for the asset class but also good room for growth and i you know i think you were you were at this bloomberg was it a bloomberg philanthropies uh conference recently and i think you caught that panel which was a little bit like the holy trinity of of infrastructure or real assets people because they basically had um bruce flat who's the ceo of brookfield on stage and bio ongolese obviously the founder and ceo of global infrastructure partners and then shamara wikramaneke who's the managing director and ceo of a quarry group right and they were pretty upbeat that we were kind of in the early stages of all of this infrastructure journey weren't
Speaker 2they yeah and i think part of that is speaking to the name of the event the bloomberg philanthropy there's there's a there's a real subset of investors who haven't quite made their way into infrastructure yet and you know you're speaking direct to the audience there and we have the the private wealth and retail channels coming along from almost every gp out there so it is really tapping into a lot of capital that hasn't touched the asset class before the higher end of the scale i would point out what we heard from norgy's bank investment management towards the end of last month when they announced their 1.5 billion commitment to bgtf2 it's certainly one of the larger fund commitments we're going to see uh they had also committed 900 million to cip earlier this year so i think you've got on both scales the smaller end of allocators pushing into infrastructure and maybe previously infrashy fund committers like norgy's really pushing a very high end of the market yeah
Speaker 1we should we should actually do a little bit of a brackets about the norgy's commitments the most recent one obviously but maybe you can talk the audience through that because they are quite
Speaker 2remarkable yeah this is a this is essentially a sovereign wealth fund who i remember us spending a lot of time covering every time they would analyze trying to make infrastructure commitments in sort of the 2018 2019 era and every time they thought that the asset class was too risky so clearly they've they've discovered something now that they really like they've been making a lot of direct investments in renewable energy over the last few years but we're now seeing them really start to ramp up fund commitments you usually it goes the other way if for investors and then i think also just you know in the u.s you still got so many um of the public pension funds that have barely touched infrastructure or uh you know one two percent committed so there's a lot of room for growth on that side of things as
Speaker 1well yeah yeah no i think it was bruce flat he shared some really interesting stats on that panel which i think are worth recounting again for the for our audience's benefit but he essentially said that you know infrastructure went from zero in institutional accounts 20 years ago to what do you call like an average of 15 percent um he predicted it's going to be 30 percent of uh institutional aum and then he also signaled that when it comes to retail wealth accounts um it's at zero now actually and he thinks it's going to end up being 20 percent or more and you know and obviously he also brought up the the enormous you know build out that is going on in an ai and other parts of the infrastructure world so there is a lot of optimism which i think is you know well grounded right from a numbers
Speaker 2perspective yeah yeah if we're talking 200 billion q1 q3 25 what are we talking in uh 2030 400 billion
Speaker 1that's that's going to come down um to time on the road but we certainly have 426 billion of unlisted closed-ended funds in market looking for for capital so you know uh if they all get it we might be at that point that you've just signaled
Speaker 2well that would be a lot of optimism
Speaker 1yeah and i think we've referenced this in prior editions of our fundraising podcast but of course i i now feel it's almost inevitable that there's going to be a dip in 2026 because of it's just the numbers it's just what's in market and etc yeah
Speaker 2i don't i don't know that we're necessarily seeing the ladder-shaped fundraising graph that we saw sort of 2015 onwards through to 22 minus the covid blip i think we might be seeing more of the the peaks and the troughs i don't think we should use either a peak or a trough to necessarily judge an overall health of the asset class but i think you know on an average basis it would still
Speaker 1be doing very well yeah and of course you know as i think you did an interview very recently with sarah if i'm not mistaken from canada i think it's worth you know now that things are threatening to get a little bit heady again um it's worth bearing in mind that there are plenty lps out there that seem to favor the slower rhythm that was imposed by the you know the change in macro conditions
Speaker 2isn't it yes uh so plan for the uninitiated uh managed the canadian pension funds uh map map uh the municipal employees pension plan in particular was one of the early investors in the asset class. sort of was in the first couple of gip funds to give you some perspective there and they were saying to us that actually the fundraising slowed down of 23 and 24 came at exactly the right time in the sense that they were about having to start some uh what they called uncomfortable conversations with gps uh about the hand over fist fundraising that we saw at that point and you know they they were spared having those conversations but it is as you say a sort of amber light in terms of managers thinking that we are back in another uh another direction like that and can come back to market as soon as possible
Speaker 1yeah yeah yeah i think that's a good place for us to leave this on um zach thanks very much for your comments and um i can't wait for the end of year um fundraising wrap-up maybe um maybe there's a another genuine surprise or two in the
Speaker 2mix for us well it is the most wonderful time of year right
Speaker 1yeah it certainly is all right good to see you and we'll uh we'll catch up soon
Speaker 2okay great to be here that again was
Speaker 1zach bentley america's editor for infrastructure investor to hear more of our episodes head to infrastructureinvestor.com forward slash podcast or you can search and subscribe to the infrastructure investor podcast wherever you like to listen registration is now open for
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