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Private equity firms raise record amount for infrastructure in 2018


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Private equity firms raise record amount for infrastructure in 2018

Private-equity firms have raised a record amount for infrastructure investing in 2018 drawn by the appeal of its steady returns and the growing need to upgrade and expand the world's railroads, natural gas pipelines and data centers.

Investors have collectively raised $68.2 billion in the first three quarters, up 18% over the same period in 2017 and have surpassed the $66.2 billion amassed in 2016, The Wall Street Journal reported Oct. 7, citing data from Preqin, a data and intelligence source for the alternative assets industry.

Major players are KKR & Co., Stonepeak Infrastructure Partners and I Squared Capital, which each raised an investment vehicle roughly worth $7 billion in 2018.

The total does not include the $5 billion raised so far by Blackstone Group LP in the initial phase of its planned $40 billion infrastructure fund. Stonepeak and Blackstone said they would focus more on energy and telecom than on transportation.

Two other infrastructure firms, Global Infrastructure Partners and Brookfield Infrastructure Partners LP, which raised $15.8 billion and $14 billion funds, respectively, in 2016, are looking to raise new vehicles of about $20 billion each.

The U.S. is the largest market for energy-infrastructure assets because the fracking revolution and the boom in green-energy projects have created new opportunities for investment, said the WSJ report.

KKR, in July, agreed to acquire Discovery Midstream Partners, which gathers and processes natural gas, for about $1.20 billion through a newly formed joint venture with energy company Williams Cos. Inc.

The digital revolution has also attracted attention to U.S. telecommunications assets such as cell towers and data centers. In June, Brookfield agreed to buy 31 of AT&T Inc.'s data centers in a deal worth $1.1 billion.