Global Infrastructure Deals Plunge in Second Quarter

Volume and value are halved year over year after sharp quarterly decline.

Global infrastructure deals slid in both volume and value over the second quarter, with both categories accounting for only half of the total of each quarter since Q4 2015, according to a report from Preqin.

There were 277 deals announced totaling $51 billion, down sharply from Q1’s 373 deals, which totaled $90 billion. The figures fell nearly 50% year over year from Q2 2016’s 504 year-to-date (YTD) deals at $101 billion.

Every quarter from Q3 2015 to Q4 2016 experienced total values over $100 billion—which neither quarter in 2017 has been able to do.

“2016 saw record levels of activity throughout the year, but this momentum does not seem to have been sustained, and deal volume is now around half what we saw in the same quarter last year. However, there are indications that deal flow may bounce back in H2,” said Preqin’s Tom Carr, head of real estate asset products, in a statement. “The closure of several mega infrastructure funds has injected a large amount of capital into the dealmaking market, which fund managers will be looking to deploy quickly. In addition, concerted efforts by both the US and Chinese governments to generate new private infrastructure investment are likely to provide more opportunities for attractive projects.”

A majority of the deals came from Europe. with 146 totaling $11 billion in value. However, North America’s 78 deals totaled $19 billion — the highest value of any region. The largest deal recorded was Canada’s Pembina Pipeline Corporation’s $9.7 billion acquisition of Canadian pipeline operator Veresen.

Nearly one-fifth of the deals in 2017’s first half were worth $1 billion or more, up 14% YTD, pushing the average size of 2017’s YTD infrastructure deals to $519 million — also up from 2016’s $344 million average.

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