This week ING Infrastructure Funds announced it had abandoned its flagship EUR 1 billion European focused infrastructure fund due to tough fundraising conditions. The ING fund joins a long list of unlisted infrastructure funds that have failed to attract investor commitments and as a result, in the last 12 months, have been either placed on-hold or abandoned.
The current lack of fund closures in the infrastructure fund market and the slowdown in the rate of investor commitments has been well documented over recent months. However, by examining the source of investor allocations for infrastructure investments it appears that the problem should only be temporary. The number of investors carving out separate allocations to the asset class as they put in place permanent programs for infrastructure investing is increasing year on year. 53% of investors now have a separate allocation to infrastructure, up from the 47% observed last year. 31% of infrastructure investors currently make investments in the asset class though their private equity allocations and 16% do so through their real assets allocations.
Preqin’s 2009 Infrastructure Review has extensive analysis on the current infrastructure fundraising market and investor appetite for the asset class.
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