North America-Based Investors in Global Infrastructure – December 2014

by Justin Hall

  • 11 Dec 2014
  • INF

Preqin’s Infrastructure Online service currently tracks 365 investors located in North America that target infrastructure abroad. These firms have aggregate assets under management (AUM) of more than $10tn and, on average, currently allocate 5% to infrastructure, below the average target allocation of 7%.

US- and Canada-based investors tend to have similar investment preferences, with 39% and 42% of infrastructure investors respectively considering investing globally. When looking at the types of investors interested in global infrastructure, private sector and public pension funds make up the largest proportion, at 24% and 25% respectively. Foundations, making up 15% of investors, are the third most active investor type for global infrastructure in the US. One example of a US-based foundation investing globally in the infrastructure asset class is Brookings Institution. Over the next 12 months, the foundation will seek to commit new capital to unlisted infrastructure funds, targeting economic assets in Asia and emerging markets. A majority of US-based investors (53%) have AUM of less than $10bn, and 47% have AUM of more than $10bn, yet all are likely to consider investing in infrastructure outside North America, for diversification benefits as well as to increase return potential.

When investing globally, North America-based investors have a strong preference for developed regions. A majority of investors (86%) will invest throughout Europe, while 38% will consider investments in Asia-based infrastructure. Twenty-three percent invest in the Americas, while just 9% invest in Africa. Toronto Transit Commission Pension Society, a Canada-based private sector pension fund, maintains a 3% target allocation to infrastructure but is currently under-allocated at 1.5%. It will look to invest on an opportunistic basis in the next 12 months, targeting unlisted funds in Europe, North America, and preferably, OECD countries.

North America-based investors in global infrastructure will be looking to increase their allocation to the infrastructure asset class going forward, with the goal of filling their respective target allocations. Inter-American Development Bank, a $5.2bn private sector pension fund based in Washington D.C., is another investor looking to increase its allocation to infrastructure. The pension fund is looking to commit $50mn to unlisted infrastructure funds in the next 12 months, investing in infrastructure projects in Latin America and the Caribbean. 

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