• 267 days Could Crypto Overtake Traditional Investment?
  • 272 days Americans Still Quitting Jobs At Record Pace
  • 274 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 277 days Is The Dollar Too Strong?
  • 277 days Big Tech Disappoints Investors on Earnings Calls
  • 278 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 280 days China Is Quietly Trying To Distance Itself From Russia
  • 280 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 284 days Crypto Investors Won Big In 2021
  • 284 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 285 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 288 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 288 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 291 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 292 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 292 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 294 days Are NFTs About To Take Over Gaming?
  • 295 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 298 days What’s Causing Inflation In The United States?
  • 299 days Intel Joins Russian Exodus as Chip Shortage Digs In
Is It Time To Pay Attention To Gold Miners?

Is It Time To Pay Attention To Gold Miners?

The invasion of Ukraine by…

U.S Targets Russian Gold Stockpiles

U.S Targets Russian Gold Stockpiles

In its latest round of…

Mining.com

Mining.com

Mining.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

Contact Author

  1. Home
  2. Commodities
  3. Precious Metals

Private Investors Turn Back On Mining

Mining

Private capital tracker Preqin in a third quarter update outlines “escalated investors’ concerns” for natural resource investment with “geopolitical pressure dictating much of the momentum” in the industry.

The falling returns, high dry powder levels and record-low fundraising in Q3 have done little to alleviate this uncertainty.

Fundraising by unlisted funds for investment in natural resources – oil and gas, timberland, farmland, water and mines – totalled $8.2 billion during the third quarter, the lowest quarterly tally in over five years.

Preqin’s analysis shows energy-focused funds, mainly oil and gas destined for North America as investments in coal have dried up, accounts for almost all activity.

During the September quarter, not a single dollar were committed to the 15 mining and metals focused funds currently in the market.

Together these funds are seeking a collective $6.8 billion from so-called limited partners which include sovereign wealth funds, public and private pension funds, foundations, family offices and other entities.

2019 is shaping up to be a dismal year with a mere $100 million raised during a Q2 and an unsuccessful first quarter.

If there is one ray of light for the sector it’s Preqin’s quarterly survey which showed 27% of investors are looking to target metals and mining over the next 12 months, up from 11% this time last year.

$5 billion on the sidelines

Four metals and mining funds closed in 2018 and raised $2.5 billion with the bulk of the funds destined for North America. 

Mining and metals fund managers hold $4.9 billion in dry powder (funds ready to be deployed). These funds also hold $15 billion of investments in the sector that still has to be exited. Oil and gas dwarves the mining sector with assets under management of $569 billion.

Preqin, which has been tracking global private capital flows since 2003, counts 50 active fund managers focused on metals and mining (compared to 751 focused on oil and gas).

Falling returns

Preqin’s Q3 report shows falling returns across all real assets strategies with natural resources funds most affected.

The asset class produced an annualized return of just 5.7% over the one-year period to December 2018.

Despite this, natural resources have outperformed real estate over the three-year period, with an annualized return of 12.6% according to the London-based research company.

By Mining.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment