Infra and distressed credit were the biggest Q3 risers

The hunt for yield has helped push up average high bids for infrastructure funds by almost 11%, according to Setter Capital.

Infrastructure and distressed credit funds had the strongest year-on-year price rises in the third quarter amid a mixed pricing picture, according to a report by intermediary Setter Capital.

The average top bid for stakes in infrastructure funds rose 10.8 percent to 98.3 percent of net asset value during the 90 days to 30 September, compared with the same period last year, the firm noted in its September pricing report.

Distressed credit funds were rose by the second-most, with average top bids jumping 8.8 percent to 92.5 percent of NAV.

High prices for stakes in infrastructure funds is being driven by record fundraising for the asset class, which in turn is pushing up valuations, according to Andrea Echberg, a partner and head of European infrastructure and real assets at Pantheon.

“This increase in investor demand has been driven by the hunt for yield in low/negative interest rate environments and central bank liquidity actions,” Echberg said. “While dealflow is active, the significant inflow of capital is driving valuations in parts of the sector, notably large trophy assets, to record highs.”

Infrastructure fundraising hit a record $53.7 billion last year, according to figures from sister publication Infrastructure Investor, not including funds set aside for co-investments.

Special situations had the biggest drop, falling by 7.9 percent to 86.3 percent of NAV, followed by real estate which fell by 4.8 percent to 83.58 percent of NAV.

Setter’s report is based on actual bids or indications made during the period.  It covers data from around 1,300 buyers.

Year-on-year change in average top prices 


90 days to 30 Sep 2016 (% of NAV) 90 days to 30 Sep 2017 (% of NAV)

Price change (%)

LBO 94.98 97.17 2.31
VC 82.44 79.03 -4.14
Growth 89.42 90.85 1.59
Distress Credit 85.00 92.49 8.81
Fund of funds 85.72 84.21 -1.76
Secondaries PE 87.39 83.35 -4.62
Infrastructure 88.70 98.30 10.82
Source: Setter Capital