Appetite for Infrastructure of China-Based Institutional Investors – December 2015

by Della Lin

  • 23 Dec 2015
  • INF

Infrastructure investment has gained much attention in Asia in recent years, with China being one of the most active participants in both domestic and overseas markets. Indicative of this appetite, the China-led Asian Infrastructure Investment Bank is planning $40bn of infrastructure investment to revitalize the regions along the ancient Silk Road as part of the ‘One Belt One Road’ initiative.

Preqin’s Infrastructure Online service features profiles of 50 China-based investors that are actively investing or are considering investing in infrastructure, representing 14% of the Asian infrastructure investor universe. Despite having a smaller pool of investors than Japan or India, which represent 24% and 15% of the Asia-based infrastructure population respectively, China-based institutions have larger total assets under management ($11tn). Asset managers, insurance companies and corporate investors are the most numerous infrastructure investors based in China, representing 22%, 18% and 14% respectively.

With institutions with traditionally large asset bases making up the majority of China-based infrastructure investors, it is unsurprising that a greater proportion of these investors will target the asset class directly (80%) than investors based in the rest of Asia (54%). In terms of unlisted investments, China-based investors have less of an interest than institutions from the rest of Asia (76%), although a high proportion still access the asset class through this route (68%).

A notable 79% of China-based infrastructure investors focus on the domestic market, with a wealth of opportunities available to them due to the number of underdeveloped cities in need of infrastructure facilities. Enthusiasm for overseas markets is relatively low, with 13% of institutions interested in Europe-focused funds, 9% ASEAN-focused funds and just 6% interested in North America-focused funds.

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