Infrastructure Investors on the Hunt: Institutions and Route to Market – April 2013

by Julia Goodall

  • 23 Apr 2013
  • INF

Preqin is currently tracking 1,750 investors that are active in the infrastructure asset class. Of these institutions, 662 are known to be open to making new investments in infrastructure opportunities over the coming 12 months. Fifty-six percent of these institutions with plans to invest in 2013 are actively seeking new opportunities, while the remaining 44% are planning to invest on an opportunistic case-by-case basis.

Fifty-two percent of government agencies tracked by Preqin’s Infrastructure Online are currently seeking further investments in the infrastructure asset class. Of these investors, 61% are actively searching for investments, while the remainder intend to invest opportunistically; these investors may therefore prove to be a significant source of capital for fund managers in 2013. Asset managers, public pension funds and fund of funds managers with an allocation to infrastructure are also prominent investors in the market, with 50%, 49% and 47% of each investor type respectively open to new investments over the next 12 months. Of these investors, 36%, 38% and 27% respectively are actively planning to invest, with the remaining following an opportunistic strategy towards further investments. Investors with long-term liabilities such as insurance companies and pension funds are also expected to remain among the most active investors in the coming year.

In terms of preferred route to market for future infrastructure investments, commitments to unlisted funds remain the most prominent route, with 87% of institutions with plans to invest in infrastructure over the next 12 months looking to utilize this strategy. Active investors looking to make direct investments in 2013 are also prominent, with 36% open to this form of investment. Only 9% of active infrastructure investors favour listed funds as a route to market.

The majority of investors actively seeking new investments in 2013 are focused on primary equity investments, with 98% expected to focus on this strategy in the coming 12 months. Sixteen percent of active investors are open to debt/mezzanine funds, although only 1% of investors are exclusively seeking debt/mezzanine exposure as opposed to a mix of debt and equity. Just 4% of active investors plan to target infrastructure funds of funds over the coming year.

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