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The Evolution of Funds of Funds in the Infrastructure Market

by Richard Stus

  • 22 Sep 2009
  • INF

Funds of funds are a relatively new phenomenon in the infrastructure market. Subsequently, the number of infrastructure-specific fund of funds vehicles is small, which is not surprising given the relatively recent emergence of the unlisted infrastructure asset class as a whole.

Despite these small numbers however, infrastructure funds of funds are a growing niche. They give investors access to a diversified portfolio of assets in terms of geography, project stage and sector and it is therefore likely that the infrastructure fund of funds market will continue to grow as investors look to spread risk within their investment portfolios.

Preqin’s Infrastructure Online database has identified 15 infrastructure specific fund of funds vehicles, three of which have held a final close. Of the 12 still on the road, six have already held interim closes in order to begin making investments.

In terms of the geographic focus of the vehicles, nine infrastructure fund of funds vehicles are focused on Europe, two on North America and four on Asia and Rest of World. It is important to note, however, that 87% (13) of these infrastructure-specific fund of funds vehicles follow a multi-continental strategy in order to achieve a globally diverse portfolio, and will allocate capital to projects in various locations around the world.

To find out more about the infrastructure fund of funds universe please click here to learn more about Infrastructure Online and the new 2009 Preqin Infrastructure Review, which both contain useful information on infrastructure funds of funds.

 

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