Infrastructure Investors Survey 2013

As funds emerge stronger from the economic downturn and direct investors firmly establish themselves in the market, the outlook for the infrastructure investors sector is markedly different from the last survey from Deloitte UK, when some questioned whether the infrastructure fund model would even last. So how has the sector changed, and in the midst of rising competition and a dynamic risk environment, how is it likely to evolve going forward?

Key findings

• 70% of infrastructure investors are achieving or exceeding their target internal rates of return. This strong performance reflects a greater focus on asset management - 41% have recruited dedicated asset management teams.
• Competition across the sector continues to rise, as direct investors have established themselves and core infrastructure assets are in short supply. In response, investors are exploring alternative strategies, including a greater focus on bi-lateral opportunities, new markets and models.
• When asked to state key risks to investments, 35% cited regulation and 29% cited political risk.
• 73% considered that lenders' appetite for infrastructure is high (32%) or very high (41%); while fundraising is subject to greater diligence from LPs.
• Looking forward, regulated utilities and transport are among the most attractive asset sub-classes for investors; while Western Europe, in particular the UK, Germany and Scandinavia, remains the most popular geography, followed by North America and Australasia.
• Exits are set to pick up significantly over the next few years, as first generation funds approach maturity.