The current infrastructure institutional investor universe comprises a wide variety of firm types. 20% of investors are public pension funds, making this the most prominent type of investor currently active in the infrastructure space. There are also a significant number of private pension funds investing in infrastructure, accounting for 16% of the total. Superannuation schemes represent a further 8% of infrastructure investors, meaning the various types of pension plans account for 44% of all investors in the asset class. These investors are attracted to infrastructure due to the potential for stable inflation-linked returns, which matches the long-term liabilities of a pension fund.
Aside from those investors already actively investing, there are also a significant number of investors considering carving out an allocation to infrastructure. Preqin is currently tracking over 140 investors considering making infrastructure investments in the future. 45% of these investors are public pension funds, 12% are private pension funds and 1% are superannuation schemes. This suggests that pension plans will continue to be an important source of investor capital for the asset class in the coming years. Insurance companies and endowment plans make up 14% and 8% respectively, whilst family offices and asset managers each represent 4%.
In terms of location, the infrastructure investor universe is geographically diverse, with investors from 67 countries currently featured on the Preqin Infrastructure Online database. Nearly a quarter (24%) of investors in infrastructure are based in the US, making it the most prominent region of activity. European investors as a whole represent 42% of the global total, with 13% based in the UK alone. 10% of infrastructure investors are based in Australia, the majority of which are superannuation schemes.
8% of investors dedicate less than 1% of total assets to infrastructure investments, while 42% have a 1-4.9% target and 31% target between 5% and 9.9%. 19% of all active investors target over 10% of total assets to infrastructure opportunities. These investors tend to be infrastructure-specific fund of funds managers, private equity fund of funds managers with an allocation to infrastructure, development companies with a focus on infrastructure and infrastructure-specific investment companies.
This blog is an excerpt from the investor section of the new 2011 Global Infrastructure Report. For more information and to order a copy of the Report which includes information on infrastructure investors, fund managers, funds, deals, fund performance and much more, please click here.