Emerging Markets-Based Infrastructure Fund Managers - October 2012

by Paul Bishop

  • 24 Oct 2012
  • INF

As the infrastructure asset class matures, a growing proportion of institutional investors are examining emerging market investment opportunities in order to further diversify their portfolios. Preqin currently tracks 42 infrastructure GPs based outside of the core European, North American and Asian markets, which have closed 62 unlisted infrastructure funds between them, raising an aggregate $37.4bn in investor capital. These fund managers handle a further 23 funds currently on the road seeking $18.9bn in fresh commitments.

Brazil is the most prominent country in terms of number, with 11 firms based in the country. These firms have closed 12 unlisted infrastructure funds, raising a combined $3.8bn. Australia is the second most significant country in terms of number of fund managers, with seven Australian firms handling unlisted infrastructure funds. However, Australia is much more significant in terms of aggregate capital raised, with Australian firms raising an aggregate $26.3bn in capital across 25 funds. Despite being located outside of the traditional developed markets of Europe and North America, Australia is a significant infrastructure fundraising market, with several well-established firms based in the country such as Macquarie Infrastructure and Real Assets (MIRA) and AMP Capital Investors.
In terms of the regional breakdown of emerging markets-based infrastructure fund managers, Latin America is the predominant region, with 18 firms based in the region. Ten fund managers are based in the Middle East and Israel (including five located in United Arab Emirates), while six are based in Africa. One firm is based in New Zealand, bringing the total number of infrastructure GPs based in Australasia to eight.

In terms of geographic focus, the most targeted country by funds managed by emerging markets-based firms is Brazil, with 22% of vehicles investing in the country. Africa and Asia are jointly the second most targeted regions with 14% of funds managed by emerging markets-based GPs targeting these areas. The majority of emerging markets-based fund managers target domestic investment opportunities, with just 6% and 8% of funds managed by these firms targeting opportunities in North America and Europe respectively. Multi-region funds are also less popular among emerging markets-based fund managers, with only 8% of fund managers investing in multiple regions.

The most targeted industry sector by emerging markets-based infrastructure fund managers is transportation, with 76% of all of these GPs making investments in this sector. Energy is a close second followed by utilities, with 69% and 55% of firms investing in each sector respectively. Core infrastructure sectors such as renewable energy and telecoms are also significant, with 52% and 36% of emerging markets-based GPs investing in these industries respectively; 36% invest in social infrastructure.

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