Managers in a number of real asset sectors — with the possible exception of infrastructure — are having a tough time raising capital. And that is only the leading edge of the storm buffeting them.
Some timber funds are nearing the end of their lives with managers expected to bifurcate into the haves and have-nots when they go out to raise new funds;
Farmland is in a state of flux, with managers now making value-added investments;
Real estate managers have more money than they can spend, with a record amount of dry powder but fewer deals.
Fundraising is slowing. Many institutional investors' allocations to real assets have little room for expansion, said Peter Martenson, partner in the San Diego office of placement agent Eaton Partners LLC.
"(Limited partners) have full allocations and commitments are going a little bit slower because, I think, real assets has not had a reason to shine," Mr. Martenson said. "Commodity prices have stayed low. Oil and gas is a classic example. People thought the recovery would have happened sooner. It's the same thing with metals and mining, in general."
Investors might fill in around the edges, like adding a tactical strategy that feels compelling, he said.
Also hurting fundraising is that, at least in the U.S., few investors are expecting either inflation or deflation, which is one of the reasons many investors invest in real assets.