Investment consultants can prove an important resource to investors seeking opportunities in the alternative asset classes. The opaque nature of the alternatives space means that it is often not cost-effective for firms to dedicate resources to the time-consuming task of sourcing opportunities, conducting due diligence and monitoring investments, and therefore the services of an investment consultant may prove helpful in providing broad or specialist knowledge of sectors, funds or managers. As of Q4 2012, 38% of investors tracked by Preqin utilized the services of an infrastructure investment consultant, whereas 62% had an in-house team.
While 48% percent of alternative investment consultants tracked by Preqin are able to offer clients services covering the infrastructure asset class, only 1% of these firms provide clients with infrastructure-only consulting services. This is a moderate increase from consultants’ coverage of infrastructure in 2010, when 34% of alternative investment consultants tracked by Preqin provided clients with infrastructure consulting services.
The majority of infrastructure investment consultants are located in North America (57%) and Europe (35%), with only 8% being located in Asia and Rest of World. The most common locations for infrastructure investment consultants to be headquartered in Europe are the UK (30%), Switzerland (21%), Germany (16%) and the Netherlands (13%), accounting cumulatively for almost 80% of infrastructure investment consultants in Europe.
As uncertain economic conditions continue to lead investors to search for returns and diversification outside of traditional investment routes, it will be interesting to see whether more alternative investment consultants move to include infrastructure advice within their service offering and whether more investors utilize such services.