Two thirds of institutional investors intend to increase their allocation to infrastructure assets over the next three to five years, according to a new survey.
Global investors are drawn to the diversification benefits of infrastructure, as well as its higher returns and inflation-hedging potential, according to new research.
The Global Infrastructure Hub, an organisation backed by the G20, partnered with the EDHEC Infrastructure Group to survey 184 institutional investors about their attitude towards infrastructure assets.
The research found that 65 per cent of investors intend to increase their allocation to infrastructure over the next three to five years.
In addition, 81 per cent of respondents said infrastructure suits investment periods of more than a decade; 92 per cent are worried about the build-up in 'dry powders' (money held by investors that has yet to be invested; and 70 per cent believe infrastructure must be recognised as an investment asset class.
But a lack of attractive available investments is holding investors back, fueling concerns that "available capital will far exceed the number of available opportunities", said the report.
Respondents also said governments should do more to encourage increased investment in emerging markets infrastructure.
"Thirty-three per cent of investors want exposure to emerging markets for the first time. Competition and lack of pipeline in OECD markets will likely encourage this trend to new markets," said the report.
Of the 184 respondents, 20 per cent said they already had investment in infrastructure in emerging markets. Thirty-three per cent do not currently invest in infrastructure but would "like to".
Respondents said the number of investors in infrastructure is expected to increase by 165 per cent over the next three to five years.
Wealth management relationships are under threat as clients look to switch providers driven by the impact of the royal commission. ...
S&P Dow Jones has announced a new addition to its global ESG index using enhanced ESG scores and granular data. ...
Investor confidence is on the rebound and the ASX hit a 12-year high on Monday. But it’s not all good news for the Australian economy. ...