According to a new report by private capital tracker Preqin, overall fundraising for natural resources investment actually declined declined by a fifth in 2016 to the lowest since 2012.
Coming off a record 2015, 74 funds raised a total of $60bn in 2016 for investment in natural resources, which includes metals and mining, water, timberland and energy. Private providers of capital include pension funds, sovereign wealth funds, endowments, family offices and others.
In 2015 mining and metals made up a paltry portion of funds raised with three funds closing on $1.1 billion in 2015. Last year five funds managed to raise $2.1 billion. 2012 was the peak year for mining fundraising with $4.6 billion of capital commitments from investors.
That’s still small beer compared to the money going into oil and gas however. The top 10 largest natural resources funds that reached a final close in 2016 raised $38 billion. All 10 are focused on energy-related assets, and all but one focus on projects in the US.
So called dry powder – money ready to be invested – for natural resources now total $187 billion. That’s double the tally at the end of 2011 mostly on the back of a sharp rise in energy-focused funds targeting North America with uncalled capital commitments.
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