Alternative investment funds raised a total of $602 billion in 1,228 funds last year, down in capital terms from $637 billion raised by 1,486 funds in 2015, according to a new report by alternative investment research firm Preqin.
Currently, there are 2,965 alternative investment funds seeking to raise a combined $1 trillion.
Among the alternative investment asset classes, 807 private equity funds closed on a total of $345 billion in 2016, up from $328 billion by 944 private equity funds in 2015. Half of the private equity funds exceeded their target sizes. The average private equity fund size was a record $476 million, exceeding the previous high of $446 million in 2007.
Infrastructure managers raised a record amount of capital in 2016, with 51 funds closing on $58 billion, up from 70 funds that raised $40 billion in 2015. Infrastructure funds last year closed after an average of 18 months of fundraising, down from 27 months in 2015.
Natural resource funds did not fare as well. Some 70 natural resources funds raised $58 billion in 2016, down from 91 funds with a total of $74 billion in 2015. The top 10 natural resources funds raised a combined $38 billion and they were all focused on energy.
Real estate and private debt fundraising also faltered. Real estate managers closed on 214 funds with a combined $104 billion in 2016, down from a total of $123 billion by 274 funds in 2015. Meanwhile, 119 private debt funds raised a total of $74 billion in 2016, down from 152 funds that closed on $96 billion in 2015.