Infrastructure: US Managers, European Assets, and Asian Opportunities

The infrastructure investment market hasn’t truly globalized, according to Preqin data, which shows managers and deals have clustered in the developed world.

(July 17, 2013) - The 10 most successful fundraisers among unlisted infrastructure managers accounted for 45% of capital raised in the last decade, according to a Preqin report.

Even within those 10, the funds raised were far from evenly distributed. New York-based Macquarie Infrastructure and Real Assets (MIRA) raised $26.2 billion in the past decade—nearly doubling its closest competitor Global Infrastructure Partners, also based in New York.

"The fact that nearly half of the aggregate $231 billion raised by infrastructure fund managers globally over the past 10 years was secured by just 10 firms illustrates that fund managers that are able to illustrate a positive track record can attract significant levels of capital," according to Preqin's Elliot Bradbrook, manager of infrastructure data.

Europe remains by far the most prominent region for infrastructure deals, yet nine of the top 10 fund managers are based in North America. Of infrastructure deals done in the second quarter of 2013, 71% involved European assets.

As of July 2013, there were 144 unlisted infrastructure funds globally, seeking to raise an aggregate $94 billion in investor capital.

In the second quarter of 2013, managers closed on 59 deals, amounting to a 22% increase over the previous quarter. Experts at Preqin said this figure would likely continue to rise as more data becomes available, but the number already indicated positive momentum within the market.

Asia, in particular, presents a rich source of opportunity, according to Ee Fai Kam, a senior research analyst with Preqin.

The Asian Development Bank (ADB) has estimated that Asian nations collectively will need to invest $750 billion dollars in national infrastructure annually over the next seven years. This will lead to substantial private market investment opportunities, Fai Kam wrote in the report. There are currently 88 infrastructure fund managers that invest in Asia, 21 of which have open funds and are trying to raise a collective $9.4 billion.

The paper also highlighted the risks of investing in emerging market infrastructure, citing an example from India in 2011, where new regulations led to the abandonment of infrastructure debt funds. 

Related Article:Fund Managers Clamour for Rising Infrastructure Inflows 

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