Insurance companies turn to infrastructure

by Louise Taggart

  • 14 Sep 2010
  • INF

As the unlisted infrastructure market continues to develop, a greater number of institutional investors are beginning to look to the asset class to provide diversity within their existing investment portfolios.  Insurance companies are one such investor type seeking exposure to the asset class along with other investors like pension plans, asset managers and investment banks. 

Nationwide Insurance is one such insurance provider seeking to make opportunistic commitments to unlisted infrastructure funds in the coming 12 months. The insurance company is now looking to increase its exposure to infrastructure assets and will commit between USD 15 million and USD 20 million in an individual fund. Another such firm targeting infrastructure opportunities is Israeli insurance company Migdal, which is looking to introduce an infrastructure element to complement its current interests in private equity, hedge funds and real estate.

Preqin’s Infrastructure Online database currently tracks over 820 active investors in the infrastructure asset class, of which 7% are insurance companies. The most active investors in infrastructure are pension plans, with public and private schemes representing 23% and 15% of investors respectively, followed by superannuation schemes at 8%. Banks and asset managers both represent 7% of active investors.

Geographically, investors in the US, the UK and Australia dominate the sector, with 50% of all active investors based in these three countries. US-based investors account for the highest proportion, representing 27% of all investors, followed by the UK and Australia with 13% and 10% of investors based there respectively.  However, Europe remains the centre of activity in the asset class with 42% of investors located in European nations.

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