GLOBAL - The vast majority of institutional investors (81%) did not make any new commitments to infrastructure in 2009, a drastic slowdown in fundraising from last year, a survey from Preqin revealed.
Findings showed year to date there have been just seven infrastructure funds achieving a final close, raising an aggregate US$5.5bn between them.
In the same period in 2008 a total of 27 infrastructure funds had achieved a final close, collecting aggregate commitments of $20.4bn.
Preqin spokesman Tim Friedman said: "Although fundraising over the course of the past year has fallen dramatically, investors are generally still positive towards infrastructure funds, and our survey would suggest that investors will start to return to the market over the course of the next year.
"However, commitment levels have been very low, and there are concerns among a large proportion of the infrastructure investor community relating to the viability of certain types of investment, and also with regards to the fees imposed by the funds themselves."
The survey - which involved 42 institutional investors in unlisted infrastructure funds from around the world - also found 14% have invested in one fund and only 5% in more than one new fund.
However, 40% of investors polled will be making at least one new commitment in the coming year. Twenty-nine per cent have no plans to invest while 31% are undecided.
In a separate report, Preqin found yearly returns in private equity were down 30% at the end of March.
Preqin head of research Etienne Paresys said: "Private equity performance as of 31 March 2009 is still poor for most fund types, with portfolio valuations continuing to drop as fund managers remain unable to exit any of their previous investments.
"Although data for the second quarter of 2009 is currently too limited to create meaningful benchmarks, it does appear that the recovery in the public markets is also being seen in private equity. Returns are stabilizing, and it is likely that future quarters will show a modest increase in net asset value after a sustained period of decline."
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