Australasia-based investors in Infrastructure - May 2014

by Joyce Chee

  • 02 May 2014
  • INF

Preqin’s Infrastructure Online service currently tracks 114 Australasia-based investors in the infrastructure asset class, representing a substantial 31% of institutional investors from the Asia-Pacific region. Of the investor pool, 92% are located in Australia, while the other 8% are based in New Zealand and Papua New Guinea. Collectively, these 114 institutions have $3.5 trillion in assets under management. In terms of allocation, Australasia-based investors have an allocation of $58 billion to the infrastructure asset class. 

Superannuation schemes are the most common (57%) investors in the Australasia region. This is hardly surprising as the long investment horizon of infrastructure appeals to these institutions with long term liabilities. Asset managers make up the second largest proportion (18%) of investors in infrastructure. This is followed by insurance companies (5%) and foundations (4%). Banks, investment companies and wealth managers each account for 3% of the investor pool. 

A hefty 87% of Australasia-based investors access the infrastructure asset class via unlisted funds. Private funds provide diversification for institutional investors, giving them access to a range of infrastructure industries which the average investor may not be able to achieve through direct investments. Thirty five percent of Australasia-based institutions investing in infrastructure have an interest in direct assets. This indicates that Australasia-based investors are open to different routes such as through the pooling of capital with other institutional investors and also building in-house expertise to further enhance and strengthen their investment capabilities. 

In terms of strategy, an overwhelming 97% of Australasia-based institutions have a preference for the primary strategy. Twenty one percent of the investor pool favour the debt strategy, while 4% will invest via fund of funds and 3% will access the asset class through secondaries funds. In terms of the source of allocation to infrastructure, a significant 64% of institutional investors have a separate allocation to the asset class. This is indicative of the rising prominence that infrastructure has in the Australasia region. Eighteen percent of the investor pool allocate capital from their general alternatives allocation while 8% of institutions invest out of their allocation to real assets. 

A noteworthy 79% of Australasia-based investors favour investing in their home region. Interestingly, 54% of the investor pool have a global outlook when it comes to location preference. Approximately half (51%) of the institutional investors in Australasia have a preference for Europe while 40% are inclined to invest in North America. OECD countries (34%) are relatively appealing to Australasian investors while 19% of the investor pool will target Asian infrastructure.   

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