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Overview
Real assets funds had a solid 2021, with firms closing on $116.5 billion across 88 funds. This represents an uptick over the total capital raised in 2020 and is in line with the five-year average. The relatively flat fundraising sum disguises the underlying trend toward infrastructure funds. Just under 90% of the total capital raised was in infrastructure funds, a substantial rise from the approximately 55% of one decade prior. Due to the sizable nature of many infrastructure investments, funds in the space tend to be massive – the average fund size in 2021 was $1.4 billion.
Chart 1: Real assets fundraising activity
Source: Pitchbook
Fundraising has launched into 2022 with the momentum of recent record years of fundraising. US VC-backed companies raised $70.7 billion across an estimated total of 4,822 deals in Q1, marking the highest number of closed transactions in any quarter on record. Even though Q1 deal value was lower than every quarter in 2021, the number still exceeded pre-2021 quarterly totals dating back to 2010. The added dry powder should help further insulate the market from immediate, major disruption. VC deal activity will likely see a delayed reaction to the public market slowdown.
Chart 2: US VC deal activity by quarter
Source: Pitchbook
Global real estate deal volume reached an all-time high of over $1.3 trillion in 2021, after a dramatic slowdown in 2020, when markets effectively stopped transacting in the second quarter. The fourth quarter in 2021, when $498 billion of real estate changed hands, was the most active on record. By sector, multifamily and industrial reached record-breaking totals, which contributed more than half of total transaction value. Growth within these two sectors spiked, as pandemic-driven tailwinds became apparent to investors. Industrial deal volume grew for the fifth consecutive year.
Chart 3: Global real estate deal volume, $ billion
Source: CBRE, McKinsey and Company
Stephen Dickinson
Investment AnalystDarragh Kennelly
Investment Analyst
