In the first quarter of 2025, real assets funds demonstrated remarkable strength, with 18 funds raising an impressive $52 billion. This, according to a report from PitchBook.
The report noted that this figure represents roughly half of the total capital raised by real assets funds throughout the entirety of 2024, signaling a strong start to the year.
While maintaining this pace may prove challenging, the sustained allocator appetite for infrastructure funds, driven by secular trends such as decarbonization, digitalization, and deglobalization, offers reasons for optimism.
Despite persistent economic and geopolitical uncertainties, the real assets sector continues to attract significant investment, as outlined in PitchBook’s Q1 2025 Global Real Assets Report.
The robust fundraising in Q1 2025 underscores the enduring appeal of real assets, particularly infrastructure funds, which have become a cornerstone for investors seeking stable, long-term returns.
Infrastructure, as an asset class, benefits from its tangible nature and essential role in supporting global economies.
The $52 billion raised in Q1 reflects not only investor confidence but also the growing recognition of real assets as a hedge against inflation and market volatility.
However, the report cautions that this momentum may taper off as the year progresses, given the challenges posed by rising interest rates, geopolitical tensions, and macroeconomic headwinds.
Three key secular trends—decarbonization, digitalization, and deglobalization—are driving the sustained interest in real assets.
Decarbonization, in particular, has fueled demand for energy transition investments, with funds targeting renewable energy, hydrogen, and carbon capture technologies seeing significant inflows.
The global push for net-zero emissions has made infrastructure funds focused on clean energy a priority for allocators, as governments and corporations alike commit to ambitious sustainability goals.
Digitalization, meanwhile, has spurred investment in digital infrastructure, including data centers, fiber networks, and telecommunications towers, as the world becomes increasingly reliant on digital connectivity.
Deglobalization, accelerated by supply chain disruptions and geopolitical fragmentation, has prompted investors to focus on localized infrastructure projects that enhance regional resilience.
The PitchBook report provides a forward-looking perspective, forecasting real assets assets under management (AUM) through 2029.
This projection highlights the expected growth in the sector, driven by the aforementioned trends and the increasing allocation of capital to infrastructure and real assets by institutional investors.
The report also includes updated data on energy transition and digital infrastructure fundraising, offering insights into the specific subsectors attracting capital.
For instance, energy transition funds have seen a surge in commitments as investors prioritize projects aligned with global climate goals.
Similarly, digital infrastructure funds are capitalizing on the growth in data consumption and the rollout of 5G networks.
Performance metrics for North American and European infrastructure funds, also detailed in the report, indicate resilience despite economic challenges.
North American funds have benefited from strong domestic demand for energy and transportation infrastructure, while European funds have seen steady performance driven by regulatory support for green energy projects.
Meanwhile, oil and gas dealmaking activity remains a critical component of the real assets landscape, though its prominence is waning as investors shift focus toward sustainable alternatives.
The report notes a decline in traditional energy deals, reflecting the broader transition toward cleaner energy sources.
While the outlook for real assets remains positive, challenges persist.
Economic uncertainty, driven by inflationary pressures and monetary policy tightening, could dampen fundraising momentum.
Geopolitical risks, including trade tensions and regional conflicts, further complicate the investment landscape.
Nevertheless, the structural demand for infrastructure investments, underpinned by long-term trends, suggests that real assets will continue to play a pivotal role in portfolios.
In conclusion, the $52 billion raised by real assets funds in Q1 2025 highlights the sector’s resilience and appeal.
As decarbonization, digitalization, and deglobalization reshape the global economy, infrastructure funds are positioned to capture capital from investors seeking stable, impactful opportunities.
While headwinds may temper growth, the long-term outlook for real assets remains robust, with the sector poised to deliver value in an increasingly complex environment.