Institutional investors, such as public and private sector pension funds, have an overwhelmingly positive outlook towards infrastructure, with 63% planning to invest more capital in the asset class in the next 12 months than they did in the last 12 months, according to Preqin research.
This demonstrates a potential for huge growth in the capital committed to infrastructure development by institutional investors; infrastructure funds closed in 2013 so far have already raised an aggregate US$17bn in capital commitments from investors, a 55% increase compared to the US$11bn that was raised by funds closed in the same period last year.
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In addition, 58% of investors surveyed are planning to set aside a larger percentage of their total assets for investment in infrastructure in the longer term. This is a significantly higher proportion than is seen among investors in private equity, hedge funds or real estate, with 34%, 23% and 40% of investors in these asset classes respectively expecting to increase their allocations to their respective asset class in the longer term.
Other Key Facts:
93% of investors surveyed feel that their infrastructure fund investments have met or exceeded expectations over the past 12 months; this includes 29% of all respondents that feel their infrastructure investments exceeded expectations.
47% of infrastructure investors surveyed by Preqin plan to invest at least US$100mn in the asset class over the next 12 months; 12% plan to invest over US$500mn.
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By GlobalData65% of investors surveyed named regulation as a key issue facing the infrastructure asset class in 2013/14; other important issues named include the economic environment (named by 54% of investors), performance (54%), and fees (50%).
67% of infrastructure investors surveyed are uncertain about regulations introduced in 2011-2013 and whether their impact on the industry will be beneficial; a further 16% believe they are not beneficial.
