Speaker 1Hi, I'm Bruno Alves, Editor-in-Chief of Infrastructure Investor, and welcome to the Infrastructure Investor podcast. In our first episode of the year, I sit down with Zach Bentley, America's Editor for Infrastructure Investor. Zach and I do a deep dive on fundraising, covering both closed-end and open-end fundraising. 2025 was a standout year for both, particularly on the closed-end front, where $289 billion was raised. We unpack the fundraising year and find that concentration is highly prevalent on the closed and open-end side of the market. We talk through the implications of a new normal that sees closed-end funds take north of two years to reach a final close, discuss why elevated redemptions for open-end funds are not concerning just yet, and much more. Hi Zach, welcome to the podcast. Hi. I'm Bruno. This is our first episode of the year, and we're going to start by chatting about fundraising. What else, right? But we're actually going to do it slightly differently this time, because we traditionally talk about closed-end fundraising in our podcast, and we're certainly going to do that. But for a change, we also have some good data on open-end fundraising, and we're going to go into that too. So you're going to leave with a full picture of fundraising. Fundraising across the asset class. Let's start with closed-end. So according to our data, 2025 is the biggest year for unlisted closed-end infrastructure fundraising, and by some margin, right? We had $289 billion raised last year by closed-ended structures. That includes vehicles, but also co-invest capital, then separate accounts, etc. And this is way above the $200 billion high-water mark. We're going to talk a little bit more about that in just a little bit, and then we're going to go into a little bit more detail on that in just a little bit. But first, let's talk a little bit about what we've been seeing in 2021 and 2022. I guess it's fair to say, Zach, that we had been expecting this since we got our Q3 numbers. It's perhaps higher, the totals, than we had anticipated, but we're not surprised by this. But let me start by asking you, there is no way we're going to get a similar number for 2026, is there? No, no. I
Speaker 2think, as we've discussed before, there is no way we're going to get a similar number for 2026, is there? No, no. So what's in this amount is a lot of 2023 processes, which everyone knows were quite slow, and reached final close in 2025. Now if you look at what's to come this year, you still have larger funds like KKR and Stonepeak and iSquared all in market, but I've done some back-of-the-fact calculations, and line of sight, really. I'm being generous. You're going to sort of $100 billion just of what I'm seeing in market right now, and that's going to be a significant drop-off.
Speaker 1Yeah. And I think this is important because, as you rightly said, we've been signposting this is going to happen throughout all of last year, really. And we are now at that point where, if you look at time on the road for 2025, it was actually almost 26 months. So that's over two years. Yeah. Yeah. 2024 was almost 30 months, so that's quite a bit longer, going on three years. And then there is 2023 with almost 25 months, so again, over two years. So if you look at the last three years, I think we can say the time on the road is two year plus. That's where it's going to stay for a while, and given the amount of megafunds, and we'll go into it in a little bit, but given the amount of megafunds that closed in 2025, I think we are getting to a point. I think we are getting to a point where we can say that we are going to have these years that spike, depending on the number of megafunds, and these years that drop a little bit, just because of the time on the road. Is that how you're seeing it also, Zach, that this is already a little bit cemented now?
Speaker 2Yeah. And I think in a sense, we were always historically, if I'm going back a few years now, it always used to be Brookfield and GIP would raise in the same year, then there'd be the year that they weren't raising. And then so you'd have to drop off. And then they'd be back. That kind of dynamic doesn't exist anymore, a, because there are more megafunds, and b, because of this time on the road aspect. As you say, this is now a consistent three-year period where we can confidently say time on the road is two years, bar exceptions.
Speaker 1Yeah. That's a talking point people can take away already. This what we used to call this elevated time on the road is probably going to be the new normal time on the road, but there's a few adjustments here and there. I think it's worth going over for our audience's benefit, just how concentrated the fundraising market is for closed-end infrastructure. This isn't new. It's another theme we've been chatting about for years. But if you look at what happened last year, you essentially have 125 funds raising $289 billion. And then of that amount, the top 10 funds. The top 10 have actually raised $128 billion. So just 10 funds have raised almost half of all that was raised last year. And then you have the five megafunds, which account for a full one-third of fundraising, so $96 billion. So this is another feature which is really, it's completely here to stay, right? This is a completely concentrated market. There's the top 10, and there's the rest, essentially.
Speaker 2Yeah. And then the other dynamic of that is. You may not see those megafunds in the 2026 figures, but you will see a lot of the same names as some of their other strategies come to a close. Yes. And a great example of that in 2025 was Brookfield closing their global transition fund on $20 billion, and the previous year, they had closed the world's largest infrastructure fund, Brookfield Info Fund 5. So you're going to keep seeing the same names pop up, just in a different way.
Speaker 1Yeah. Correct. I think that's a really important feature because somebody might be getting excited and thinking that we're all going to raise megafunds in a few years, but actually, there is a small counter of managers that keep trotting out new products and variations, and they are the ones that have cornered that market.
Speaker 2Yeah. And we keep hearing of LPs saying they want more mid-market, but that shouldn't detract from what is clearly a healthy appetite for those larger infrastructure funds.
Speaker 1Yeah. No, there is no doubt they dominate. And I think it's interesting because looking at our data, we can also give listeners an idea of what we have been talking about, which is 2025 was the culmination of basically three years of fundraising. And if you look at the five megafunds, and when we look across our data where we have data for interim closes and the like, then something, a very interesting picture emerges. Essentially, those five megafunds, not all of them. But some of them started raising money as early as 2022 and others started in 2023. So that's the start date. And basically, we don't have data for how much money was raised at the end of 2022, but we do have for all of the other years. And so when you look at how fundraising has gone over time, the majority of capital those five funds raised was actually in 2023. So they raised $38 billion in 2023. In 2024, they raised $35 billion. And in 2025, they raised just $23 billion. So 2025 is actually the weakest year for those funds. But that's how you get to the total 96 billion.
Speaker 2It's interesting when you look at what you were saying, and you have certain examples of some of the largest funds that closed this year. You look at EQT, Infosix. They had a July 2023 first close of 11 billion euros. And had a final close of $21.5 billion in March 2025. Brookfield Global Transition, which I mentioned before, they had a February 24 first close of 10 billion and an October 25 final close of 20 billion. And another one of the larger ones in 2025, Copenhagen Info 5. They had a June 2023 5 billion first close and a March 2025 final close of 12 billion. So it kind of just illustrates what you were saying. I think of so much of that raised in either 2023 or 2024. And then just the scraping along before declaring final close in 2025.
Speaker 1And you've written about this, actually. And I think this is particularly true for the larger, the top, top funds. There is this barbell phenomenon, isn't it, that KKR highlighted in a recent earnings call. And then these megafunds, particularly many of them really, they raise almost half of it by first close, or some of them do, and then it's a long slog, and then there's a small pickup towards the end or something like that, isn't it?
Speaker 2Yeah, there's an element of the re-ups coming in for first close discounts quite quickly. And then there's the other element of a lot of investors just kind of sitting on the sidelines and waiting to see how a fund deploys, and then seeing whether they want to go into it after that. So it's LPs wanting to see what a portfolio looks like before going into it. And another element of that is that a 2024 fund. 25 portfolio look quite different to maybe the last vintage that a fund manager raised. The market has changed so much that past performance really is not an indicator of future results.
Speaker 1Yeah. This is going to be super interesting because it's true. If you're talking about three years on the road, in some cases, what you wrote in your prospectus at the beginning is really your thesis might have to adjust. And this is true in the power markets in particular, we're seeing the rate of change is enormous. So I think this is a probability and LPs should expect to see more of this.
Speaker 2Yeah, definitely. And also something I wrote towards the end of last year of just how that time on the road is also affecting things in the sense of the dynamics that change for a fund manager during this time. There were some fund managers that closed in 2025 that when they first started out raising, no one was even talking about AI. So that gives you an impression.
Speaker 1It certainly does. We should probably dip into sectors a little bit, just because this year had, you know, everybody knows the two megatrends, the energy transition, digital infrastructure. 2025 was a year where we had large scale fundraising across both of those verticals. Energy transition soared with, you know, the final close of Global Transition Fund 2, from Brookfield. And as you've mentioned, Copenhagen Infrastructure Partners, I mean, between the two of them were, we're talking about almost $35 billion, which is a huge amount. Then we also have strong final closes for Digital Bridge's third Digital Infrastructure Fund, Blue Owl's third fund. Both of them are in the $7 billion mark for the blind pool, with more co-invest in the mix and particularly in Digital Bridge. What else has caught your eye when it comes to sectors and services? Well, I think, you know, we've seen a lot of growth in digital infrastructure, but we've also seen a lot of growth in the digital sector as well. We've seen a lot of growth in the digital sector as well.
Speaker 2Well, I just want to double down on the digital part. I think when you collect both data center specific funds and more wider digital infrastructure funds that accounted for 49 billion of the capital raised in 2025, and that's more than double from 2024. And I think, Bruno, you wrote recently about, and this was talking from the investment side, about how the digital infrastructure is changing. And I think, Bruno, you wrote recently about, and this was talking from the investment side, about how the digital infrastructure and data center market is starting to mirror the energy transition market in certain ways. And actually, I think this is another way we're seeing it within fundraising, where several years ago, we saw energy transition funds and renewable energy funds become a core part of the fundraising market. And I think we might be here now with data centers and digital infrastructure.
Speaker 1Yeah. No, I very much second that. And you have only to look at where the next generation of large-scale megafund is coming from, and they're all targeting digital and they're following, they call it AI infrastructure. So, you know, make of that what you will, but it's digital infrastructure in the end. And it is jumping into the kind of targets that the energy transition used to have. And so again, Brookfield, GIP, all of those fund managers are now targeting this with this area with megafunds, right? It's finally arrived. Yeah, definitely. And it's funny because I think this moves very quickly, but I think both you and I remember when there was a certain amount of reticence and no names need mentioning, but a certain amount of reticence by managers. Well, first to class digital infrastructure as infrastructure, but also specifically to raise dedicated products. I think there was a fair amount of fears of cannibalization, particularly of flagships and so on. And all of that seems to have disappeared.
Speaker 2That's what happens when you have a tailwind. Also, you and I will remember when digital infrastructure meant a telecoms tower. Yes. That is now boring digital infrastructure. Yeah. No, I think it'll be up to LPs to decide whether a dedicated digital infrastructure vehicle is the kind of risk appetite they want, or whether they think they can get all of that through a generalist infrastructure fund, of which there are many, and which could also tackle some of the other sectors out there.
Speaker 1Yes. And that in many ways, again, mirrors the transition dynamic. We were just talking because even when the transition started sprouting its own dedicated funds, there isn't a generalist fund out there that doesn't dabble into renewables or some form of energy transition investment, right? It's the same, the same dynamic.
Speaker 2Yeah. It's all about your risk appetite.
Speaker 1Yeah, exactly. I think we should also maybe take a look at strategies, right? So we've been talking about sectors, but in terms of strategies, you have a lot of what you would expect. And that is core plus funds dominating, value add funds are up there in investor preferences. Perhaps something more unusual of the past two years is to see secondaries post a meaningful amount of, well, fundraising ability, right?
Speaker 2Yeah. And I believe secondaries this year is accounting for 5% of the total strategies. And that may seem large, but actually it's very slightly down on last year, which was 6%. And let's see what comes in 2026. But maybe as we said, with time on the road where we saw a three-year consistent figure of two years, maybe if we see a similar figure within secondaries for this year, we can start to draw a conclusion that maybe secondaries will be a very core part of the fundraising market going forwards, or at least we will expect to see this amount of secondaries in the market going forwards. You know, we had Blackstone in 2025 raising 5.5 billion for their four secondaries vehicles. And that was the 10th largest close last year. So if there's any illustration of what's happening in the secondaries market within the wider infrastructure market, there's that to hold onto. The caveat to that is that I was hosting our secondaries round table towards the end of last year, and we had five participants on it. And there was a comment from one of the participants that said that with bar one or two names that weren't on the round table, the entire infrastructure secondaries industry was on that Zoom call. So it is still a very concentrated market. Whether we'll see that 5%, 6% portion of the fundraising market in 2026, that's maybe up for debate.
Speaker 1Well, the flip side to that is that this is a very concentrated market overall. So if those five or six people on the Zoom call just keep being able to get bigger products out there, then it's all going to be fine. But actually, for our listeners to get a sense of perspective, we're talking about 6% in 2024 and 5% of capital raise for strategy in 2025. But that is up from actually 1% in 2021. And then in 2022, it was 3%. And then in 2023, it dipped right back to 2%. So we really are talking about something which was a blip on the radar to now becoming perhaps solidifying. So I think that's something that we're going to have to look at as we go forward. So that is a development we all should watch in the coming years.
Speaker 2And you have in this market a mix of both established and up and coming players. So, you know, within 2025, as I mentioned, you had Blackstone's fourth infrastructure secondaries vehicle. And at the same time, you had Macquarie's first infrastructure secondaries vehicle. So we could expect to see some new entrants come along as well. Yeah,
Speaker 1I think that's fair. Brilliant. So shall we move on to open-end? Because this is actually some data that we don't always have at our disposal. So I'd be keen to also discuss that. For open-ended data, we have once again partnered with our friends at LP Consultant B Finance, and they have basically provided us with data from 2019 to the first half of 2025, if I'm not mistaken. And the headline there basically mirrors the closed-ended side. There was by H1 $11 billion raised by the 13 largest open-ended infrastructure funds, which puts 2025 on track to be the best year since 2022. And, you know, an improvement on the low point that was 2023, and also a decent improvement on last year when things started rebounding. What's caught your attention here on the open-ended data, Zach?
Speaker 2Before I go into anything, I would just clarify for listeners the difference between the two data points where closed-end funds are only collected when the fund reaches a final close, whereas our data with open-end funds is kind of a live fundraising as they came in for each year. That being said, it's still really interesting, as you said, that it kind of mirrors that there were high points of 2022 and then a significant drop-off. Zach: Yeah. What I would say is that what may appear to be happening in the open-end market as fundraising rebounds is what we've kind of seen anecdotally with some funds of the open-end market tends to be very much a core, maybe core plus market. And it's perhaps a flight to safety from certain investors of, you know, they're seeing certain headwinds in the market and they're trying to maybe move away from value-add vehicles to a more. Zach:. more core and hopefully safe vehicle.
Speaker 1I mean, another way of looking at that is also, I don't know if we can be very definitive here, but there is a trend element. to this there is an association a growing association like you said of open-ended with core and i think there's some some managers that buck that trend such as blackstone that they have essentially you know a value-add vehicle that is open-ended but everybody else is mostly doing core right and if you look at the closed-ended spectrum most people are core plus onwards and there are fewer core closed-ended funds
Speaker 2yeah and well you you mentioned with blackstone i think the returns targeted are more core plus but they tend to come out more value-add which is why for this point we also took a look at the yields on these vehicles as part of this dive into open-end fundraising and again we saw quite a bit of a drop-off in the last couple of years of open-end fund yields uh that has now improved in 2025 to three percent but beforehand that was at two and 2.2 percent again again it's kind of just a rebound that you're seeing within the market and as our feature on this pointed out it's also a good example of infrastructure doing what it's supposed to be doing some of the dip in fundraising for open-end funds in the last couple of years was due to interest rates being high and investors not sure how this strategy will perform within that high interest rate era and actually they've by and large done pretty
Speaker 1well yeah that's true that is very true and i think the other point that we ended up kind of focusing on just to see if there was anything to it because obviously anybody who's paid attention to real estate and the usage of open-ended vehicles there has obviously bumped against the headlines about redemption queues and people trying to get out in some of the you know even big name vehicles that were had holdings in sectors like office that are seen as problematic and we also in the b finance data picked up on an uptick in redemptions over the last few years but i think it's fair to say it's a completely different phenomenon right yeah
Speaker 2it's not the same as when investors were tumbling out of real estate vehicles a part of this is maybe investors cashing in on a success and then redeploying elsewhere and another part of this is the redemption uptick kind of started in 2022 and that's when a lot of the lock-up periods for some of the relatively more successful vehicles that have been in the more recent open-end funds would have ended so these funds will usually have a three-year lock-up period mostly and we saw quite a wealth of new entrants in kind of the latter part of the last decade i'm thinking blackstone and brookfield and kkr so there's an element
Speaker 1there yeah and i think the final point that is worth highlighting here is mirroring the closed-end side this is a highly concentrated market for fundraising the b finance data shows that the largest three open-ended funds accounted for 86 percent of the 11 billion dollars that have been raised in h1 2025 so we're back to that kind of handful of managers dominating the market and vacuuming you know most of the capital
Speaker 2it's uh if you want an infrastructure head to our ii 100 ranking and pick among five different strategies from each of the top 10 is it's actually whatever fundraising data is pointing
Speaker 1towards it's exactly that so what are we what are we able to say is is by way of wrapping up for listeners i think it's fair to say that the pickup in the fundraising market is real that there is an improvement in fundraising conditions but we really have to change the lens a bit because from the moment you have two to two plus year fundraising cycles here to stay we're going to go into a different cycle of perhaps bumper years like 2025 and then years where it drops off a bit like 2026 with maybe the wild card being the popularity of some of the new products which are also large scale on the ai infrastructure side and their ability to you know make this a little bit steadier right is that a fair conclusion i think as we go
Speaker 2forward not just in terms of the infrastructure side but also in 2026 but in in the years beyond we need to and it's it's kind of uh apt for a journalist to tell listeners this uh but do look beyond the headlines because you know if you're just looking at headline figures you're going to see a graph going up and a graph going down and then a graph going up again um and that's not necessarily a healthy way to determine how well this industry is doing as we said we probably will see a drop off from the almost 300 billion in 2025 that's natural that shouldn't necessarily be seen as a bad thing it's just the dynamics of our market now as for those ai funds that you're mentioning i don't think we will see final closes for those in 2026 um obviously the gip one is open end and has recently announced that it's raised 12 and a half billion but i think there's still a period of market testing for those
Speaker 1so that I don't think we're going to see a drop off but i think we're still going to see a drop off and i think we're still going
Speaker 3to see a drop off and i think we're still going to see a drop off you
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