European Private Sector Pension Funds Investing in Infrastructure

by Emma Davis

  • 07 Feb 2012
  • INF

Europe is home to the largest number of institutional investors currently active in the global infrastructure market.  Preqin is currently tracking 584 European investors with an allocation to infrastructure opportunities, 40% of which are a form of pension scheme.  Public pension plans are the most prominent type of active investor worldwide, although private sector pension plans are also significant.  Preqin holds information on 143 European private sector pension schemes that are actively investing in the infrastructure asset class, ranging in size from EUR 54 million to EUR 47 billion in total assets under management.

The majority of private sector pension funds based in Europe (44%) are located specifically in the UK. The Netherlands and Switzerland are also prominent locations, with 17% and 13% of investors based in each country respectively.  Other notable countries include Sweden and Germany, both of which act as home to 4% of European private sector pension funds with an allocation to infrastructure.

Seventy-one percent of European private sector pension funds target European investment opportunities, more than any other region.  In comparison, 26% consider investments in North America, 10% make investments in Asia and Rest of World, and 31% invest globally.  In terms of industry preference, core infrastructure sectors are the most popular among European private sector pension plans with 48% investing in transportation infrastructure, 45% in the energy sector, 34% in utilities and 28% in telecommunications assets.

In terms of investment type, a significant 85% of European private sector pension plans have a preference for investing in traditional unlisted infrastructure funds, while 12% seek direct investments and 7% target listed fund opportunities. With regard to strategy, 95% of these investors seek to invest in primary funds, while 8% will consider fund of funds vehicles.

A prominent European private sector pension scheme actively investing in infrastructure is Stichting Grafische Bedrijfsfondsen.  The Dutch pension plan has already invested EUR 550 million in 11 European unlisted infrastructure funds, providing exposure to a diverse range of industries and project stages.  It will continue to invest in European infrastructure over the coming 12 months.

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