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- [00:03]
A
Hi, I'm Bruno Aldis, 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.
- [01:01]
B
Hi, Bruno. Good to be here.
- [01:04]
A
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 posited 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 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 1/4 to go, is already the 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 stuff?
- [02:30]
B
Well, listeners, that sound you hear is gold coins bouncing off the floor. The glory years are back.
- [02:38]
A
Yeah, we're back.
- [02:39]
B
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, which is. 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. Or 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.
- [03:20]
A
Yeah, and just to keep on this for a little bit longer, 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 7 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 Ares, latest secondaries infrastructure strategy on 3.3 billion, we have the imminent close of Artyon Infrastructure 6, which maybe by the time you're listening to this podcast has already closed north of $12 billion. So we're, you know, just back of the napkin, we're already nearing 220 billion, which is again, quite something. But it's 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 long standing fund closes finally coming to a head and producing this kind of spectacular year, isn't it?
- [04:25]
B
Yeah. 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.
- [05:02]
A
Yeah, 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 over half of all that was raised. And if you then do, if you average out the time on the road spent by that top 10 list, that amounts to 27 months, which is exactly, you know, you're over your two years and change. And if you stay at the top of the list where you have the biggest fund closes, that's your 25 billion global infrastructure partners, your equities and your Brookfield Transition 2. Those were all over two years in the making. And it's only when you get to the bottom of the list and you're firmly in the mid market and you have Asterion's third fund closing on $4 billion in less than 18 months and then Icon doing this super quick 3.7 billion fundra in like five or six months. Right. So you're right. This, we are, you know, we are essentially getting the benefit of these delayed two to three year fundraising processes.
- [06:19]
B
Yeah. And the time on the road aspect, the data that we have, Q1 to Q3 this year is 23 months and that's six months longer than the glory days of 2022. So I think it'd be really interesting if we're gathering sort of this time next year having the same podcast and seeing where that metric has gone.
- [06:38]
A
Yeah, yeah, because you're totally right. Even if you look, I think even back all, you know, 2020, 2021, 2022, they're all like 16, 17 months to close max. And obviously last year was a whopping 29 months of time spent on the road and now it's a little bit down. But I think as we've posited in previous podcasts, the jury is out on whether we're ever going to get back to that kind of 17 months. Mark.
- [07:09]
B
Yeah. Let's not crack out the champagne just yet. Or maybe let's crack out a champagne but a slightly cheaper version and see where we are in 12 months time. That'll be the real test of this.
- [07:22]
A
Yeah, yeah, I think that's fair. I think the other thing too, and this is a little bit speculative, but if you look at what is now in market, and I'm referring to funds in market of the Megafund variety. Right. It's going to be very interesting to see how much time the mega funds that are now in market, and I'm just referring to your Stone Peak 5 and your KKR, your KKR's latest flagship, ET cetera, and it's going to be really interesting to see how long they take. Right. I would expect them not to take quite as long as the ones that have been in market this year. I think that's a fair expectation. Right.
- [08:04]
B
Yeah, I think we're looking at 2026 fund closes for them and so maybe wouldn't necessarily be considered in this year's figures. Adyen, as you mentioned, might be a different case. But. And I think we should be expecting the close of digital bridge soon, which might meet 2026 figures. So there's a few things up in the air.
- [08:25]
A
Yeah, and I think a lot of that is going to be really a lot, because this is a very concentrated market, as we've discussed many a time. And so how big the mega funds remain, how speedily they close, is going to make a lot of difference to the health of the fundraising market in the near future, isn't it?
- [08:44]
B
Yeah, yeah.
- [08:45]
A
One thing we should discuss because obviously, thanks to the close of Brookfield's second transition fund, renewables once again shot up the list of sector focused capital raised and they made up a huge 68% of everything raised in Q1 to Q3, everything sector specific, that is. They've kind of dominated in previous years and they are obviously shooting up this year. But what was very interesting is up until H2 actually, digital focused funds dominated and now renewables is back on top. But we have a lot of AI funds in market. How do you think this is going to evolve now going forward? Are we always going to have renewables where we have them now, or do you think it's going to flip?
- [09:35]
B
I think we've probably had a similar conversation in previous years, but I think the figures from Q1 to Q3 this year, they do need to be caveated that much of this is being made up by two very large mega funds in BGTF2 and Copenhagen Infrastructure Partners. You've also got the Blackstone Energy Transition Fund, which closed on 5.5 billion and which is maybe more adjacent to the renewable space than the other two are. Yeah, there's a lot of larger funds taking up the airtime here. So I don't know necessarily that we're looking at a wave of renewable fund closes. And we also had the Macquarie MGATS Fund, which closed recently. Again, that was more of 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 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 US renewables fund closing in April, going above target has done pretty well for itself there.
- [10:52]
A
No, absolutely, I think. But from a product point of view, and there's a lot of question marks, what 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 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 focus on this space. Right.
- [11:30]
B
I think 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 Owl guys, formerly of ipi, do very well in some very large transactions this year as well. And closing a 7 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 with sort of broader speaking digital infrastructure, not just AI data centers. We did have Nova Cap from Canada this year which closed on 1 billion and showed there's both room for mid market and first time fund manager successes in this space still.
- [12:14]
A
And of course the other kind of counter to some of this is it's true 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 astoundingly quick in a way that took years for their traditional flagship funds to achieve, basically. And so it's going to be really interesting if these large scale players are going to come with huge funds and if they can pull it off, then we are, you know, we're going to be in a different place also.
- [12:55]
B
Yeah, yeah. That's very much a kind of wait and see. And also let's see how many legs there are in the AI race and where all these projections bottom out at.
- [13:06]
A
No, absolutely. What else caught your eye about the fundraising figure, Zach? Anything else we interested in bringing up?
- [13:14]
B
I think we slightly alluded to it before when you mentioned the Aries Fund sort of with Q1 to Q3 figures. We've got secondaries making up 4% of the total infrastructure fundraising. We have had this figure in one or two years beforehand, but those are full year fundraising figures. So we still got some road on this, but there's been Some really interesting secondary funds closing. You mentioned Aries 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 Harbourvest and Macquarie, both of which were a bit below target, but they are displaying a strong appetite for infrastructure secondary fundraising overall.
- [13:59]
A
Yeah, that's true. That is one of the promising bright spots, isn't it?
- [14:04]
B
And I think we've had the first close of Brookfield's debt fund recently, some 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.
- [14:20]
A
Yeah. And also, I mean, despite our comments on time on the road and what has driven this particular surge, 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 at this Bloomberg, was it a Bloomberg Philanthropies conference recently, And I think you caught that panel, which was a little bit like the holy trinity of infrastructure or real assets people, because they basically had Bruce Flatt, who's the CEO of Brookfield, on stage, and Bayou Angoleze, obviously the founder and CEO of Global Infrastructure Partners, and then Shamara Wickremanake, who's the managing director and CEO of Macquarie Group. Right. And they were pretty upbeat that we were kind of in the early stages of all of this infrastructure journey, weren't they?
- [15:11]
B
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 and we have 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 Nordis Bank Investment Management towards the end of last month when they announced their 1.5 billion commitment to BGTF2, certainly one of the larger fund commitments we're going to see. 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 Infoshai Fund committers like Norgies really pushing a very high end of the market.
- [16:13]
A
Yeah, we should actually Do a little bit of a bracket about the Norgies commitments, the most recent one, obviously, but maybe you can talk the audience through that because they are quite remarkable.
- [16:23]
B
Yeah. This is essentially a sovereign wealth fund who I remember 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 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. Usually it goes the other way for investors. And then I think also just in the US you've still got so many of the public pension funds that have barely touched infrastructure or 1, 2% committed. So there's a lot of room for growth on that side of things as well.
- [17:15]
A
Yeah, yeah, no, I think it was Bruce Flatt. He shared some really interesting stats on that panel which I think are worth recounting again for our audience's benefit. But he essentially said that infrastructure went from zero in institutional accounts 20 years ago to what he called an average of 15%. He predicted it's going to be 30% of institutional AUM. And then he also signaled that when it comes to retail wealth accounts, it's at zero now, actually, and he thinks it's going to end up being 20% or more. And you know, and obviously Hugh also brought up the, the enormous, you know, build out that is going on in 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 perspective.
- [18:11]
B
Yeah, yeah. If we're talking 200 billion, Q1, Q3, 25, what are we talking in 20, 30, 400 billion?
- [18:21]
A
That's, that's going to come down 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, if they all get it, we might be at that point that you've just signaled.
- [18:37]
B
Well, that would be a lot of optimism.
- [18:40]
A
Yeah. And I think we've referenced this in prior editions of our fundraising podcast, but of course 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 et cetera.
- [18:57]
B
Yeah, I don't know that we're necessarily seeing the lava 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 peaks and the shafts. I, 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 on an average basis it would still be doing very well.
- [19:21]
A
Yeah. And of course I think you did an interview very recently with Planera, if I'm not mistaken, from Canada. I think it's worth now that things are threatening to get a little bit heady again, 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, isn't it?
- [19:45]
B
Yes. So Plenora, for the uninitiated managed the Canadian pension funds map, 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 slowdown of 23 and 24 came at exactly the right time in the sense that they were about having to start some what they called uncomfortable conversations with gps about the hand over fist fundraising that we saw at that point. And 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, another direction like that and can come back to market as soon as possible.
- [20:38]
A
Yeah, yeah, yeah. I think that's a good place for us to leave this on. Zach, thanks very much for your comments and I can't wait for the end of year fundraising wrap up. Maybe there's another genuine surprise or two in the mix for us.
- [20:54]
B
Well, it is the most wonderful time of year, eh?
- [20:56]
A
Yeah, it certainly is. All right, good to see you and we'll, we'll catch up soon.
- [21:03]
B
Okay, great to be here.
- [21:08]
A
That again was Zach Bentley, America's editor for Infrastructure Investor. To hear more of our episodes, head to infrastructureinvestor.com podcast or you can search and subscribe to the Infrastructure Investor podcast wherever you like to listen.