Preqin’s research suggests that investors remain keen to invest in infrastructure funds and assets over the long term. As of August 2011, Preqin has profiles for over 1,190 institutional investors actively investing in infrastructure opportunities and over 130 other institutions that were considering establishing maiden allocations to the asset class.
The results of our June 2011 infrastructure investor study illustrate the growing importance of infrastructure assets as part of an institutional investor’s portfolio. 62% of investors plan to continue investing in unlisted infrastructure funds over the long term, while 22% expect to make direct investments and 18% plan to make co-investments in the future. 36% of surveyed investors expect to increase their allocations to infrastructure opportunities going forward and only 9% do not plan to invest at all.
In the 12 months following June 2011, 40% of investors plan to commit to at least one unlisted infrastructure fund, while a further 22% will invest on an opportunistic basis. The growth in popularity of direct infrastructure investment is also apparent, with 6% of investors planning to make direct investments in infrastructure assets over the coming year.
This study suggests a return of investor confidence and appetite for infrastructure assets following the financial crisis. It also illustrates that the alignment of LP and GP interests is slowly improving, with the proportion of investors citing both management fees and carry structures as areas in which the alignment of interests could be improved falling by 10 and 19 percentage points respectively from those stating the same in June 2010. At the same time, the proportion of investors believing hurdle rates to still be a major issue increased slightly.