Diamond Buyers Club

Those worried that the positive momentum in the mining and metals sector is beginning to wane after two years of strong gains may find encouragement from a new survey by private capital tracker Preqin.

Fundraising by unlisted funds for investment in mining and metals was a non-starter last year. A single private capital fund closed last year after rustling up all of $24 million.

A further 13 funds targeting the mining sector are currently in the market, seeking a combined $4.9 billion

The total included $5.1 billion of capital raised by diversified natural resource closed-end funds, which may allocate a small portion to mining, but overall institutions shunned the industry.

Three months into 2018 and the environment couldn’t be any different.

Orion Mine Finance in February closed on the largest mining-focused fund in five years, and the second biggest fund dedicated to the sector in history. The New York-based firm closed on its Fund II after securing $2.1 billion including a co-investment vehicle. That brings total funds raised by Orion, over the last 10 years to more than $6 billion.

Orion is not wasting time finding targets for Fund II either and has already completed six deals with nearly $830 million committed to investment. The company also exited two large Fund II investments last year, selling a global portfolio of assets to Osisko Gold Royalties in a $1 billion transaction in July and a zinc mine in Macedonia that fetched a reported $400m in November last year.

Two other small mining funds closed during Q1 and, according to Preqin's 2018 Global Natural Resources report, a further 13 funds are currently in the market targeting the mining sector, seeking a combined $4.9 billion from so-called limited partners which include sovereign wealth...

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