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Europe captured a record share of private capital funding this year as global investors aim to profit from a government spending spree on infrastructure projects.
Funds based in the region raised $311bn, or just over a third of all cash committed to private funds globally in the nine months to September — their highest share in data that spans almost two decades.
The interest of pension funds, endowments and other institutional investors in infrastructure and natural resources was a key factor behind Europe’s grab of market share, with commitments to such funds on the continent at $57bn, according to PitchBook data.
This puts European infrastructure funding on track to exceed $75bn by the end of this month, or more than double the total for 2024.
The data offers the latest sign that global investors are pivoting more towards Europe, in a year in which the German government announced sweeping spending plans and the Trump administration’s tariffs shook markets.
Major international private capital firms, which manage funds investing in private equity, private credit, infrastructure and real estate, have been touting commitments to deploy in Europe and reporting increased interest in the continent by the backers of their vehicles.
KKR has deployed more than $20bn in Europe this year excluding external debt used to buy assets, its highest total, while rival Blackstone plans to deploy $500bn in the next decade including external debt.
The German government unveiled a €500bn infrastructure fund earlier this year and investors have also shown excitement about Mario Draghi’s recommendations for boosting the region’s competitiveness set out in an EU-commissioned report.
Funds in Europe usually attract about a quarter of overall global private capital funding. The 34 per cent won in the first nine months of this year was 6 percentage points higher than Europe’s previous high of 28 per cent in 2010.
Funds investing in infrastructure, such as energy plants and data centres, and natural resources also grew in North America this year, being on track to raise more than $80bn by the end of December. But this would be a significantly smaller increase compared with Europe.
In October French firm Ardian raised $20bn for its flagship infrastructure strategy set to invest predominantly in Europe, with the number of US investors doubling compared with the firm’s last fund.
European real estate funds are also on track to more than double their take to about $25bn this year, while cash flowing to equivalent vehicles in North America is on track to fall by roughly a fifth to just over $50bn.
The maturing of European markets for private credit and second-hand private capital assets, such as stakes in existing funds, has also fuelled the continent’s growing share of the alternative assets pie. Capital that would have gone to funds in North America has crossed the Atlantic instead.