Infrastructure Funds to Watch

by Darren Fernandes

  • 26 Apr 2017
  • INF

Exposure to the infrastructure asset class offers investors downside protection through inflation-hedging characteristics, diversification from the traditional asset classes and the potential for relatively stable returns. This stability is highlighted by the PrEQIn Infrastructure Index – a measure of the average returns earned by investors in their infrastructure portfolios – which shows a quarter-on-quarter increase in returns since 30 September 2009. With the asset class performing strongly as a whole, we take a closer look at the funds which have the potential to generate the highest returns.

Preqin’s Infrastructure Online features net-to-LP performance data for more than 220 named unlisted infrastructure funds. To determine which funds to watch over the coming year, we take the returns generated by vintage 2014-2016 funds that have at least 20% of their committed capital called up. Given that these funds are in the early part of their investment cycles, the IRR becomes less relevant and therefore the net multiple is used as the key measure of performance. The multiple provides a good indication of the value added to the unrealized investments within the fund portfolio, and also considers any early distributions. Of the 38 funds fitting the criteria, the five funds that have generated the highest net multiple are shown in the table below.

Two funds raised by Singapore-based Equis take the top spots: Japan Solar Fund generated the highest net multiple at 1.97x, rising from 1.59x when the same study was carried out for the 2016 Preqin Alternative Assets Performance Monitor. Equis Direct Investment Fund takes second place with a net multiple of 1.55x, and is the second of just three Asia-focused funds that fit the criteria for this analysis. EverStream Solar Infrastructure Fund I and Equitix Fund IV are the principal North America-focused and Europe-focused funds to watch, respectively.


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