Demand for private equity funds focusing on infrastructure assets in Asia remains high among limited partners (LPs), according to a recent survey.
Around 50 per cent of the infrastructure investment consultants believe that Asia will offer attractive investment opportunities during the next 12 months, with 58 per cent looking to increase allocation to the sector, says a survey by Preqin, a London-based research firm that globally tracks private equity fundraising.
Asia has been cited by half of the infrastructure investment consultants as presenting attractive investment opportunities, given the growing demand for development in the emerging Asian economies. Europe (at 47 per cent) and other emerging markets like South America (at 42 per cent) come after Asia.
Interestingly, none of these investment consultants planned to commit less capital to infrastructure in the next 12 months. Of the 58 per cent looking to invest more in the asset, 22 per cent are looking to significantly increase their level of commitment.
A Preqin study in March has stated of all unlisted infrastructure funds targeting a single country within the emerging markets, the highest proportion is focused on India. According to the study, there are currently 38 unlisted infrastructure funds with a preference for investment in India. Out of them, 25 have already held a final close raising $9.5 billion and another 13 are currently in the market seeking an additional $7.3 billion in institutional capital. Also, nine more India-focused infrastructure funds are expected to be launched by unlisted fund managers in 2011.
In terms of crucial issues facing the asset class, management fees and other terms & conditions are of greatest concern to investment consultants, with 18% viewing this as the key issue in the current market. Other key issues include liquidity, industry regulations and asset valuations.