Infrastructure continues to be attractive to institutional investors. California Public Employees’ Retirement System’s (CalPERS), the global institutional investor, plans to invest $900 million in infrastructure funds and another $400 million in direct infrastructure investments this year, the investment committee of the $202.1-billion system was told today, reports Pensions & Investments.
The report added that the CalPERS infrastructure programme was originally approved as part of a 5% allocation in inflation-linked asset class investments in December 2007, but so far, only $220 million has been invested in infrastructure, quoting a letter from infrastructure consultant Meketa Investment Group to the investment committee.
Institutional interest and appetite for infrastructure could also mean that private equity funds operating in fast-growing markets in Asia like India may see potential commitments coming their way.
Calpers already has commitments to various PE funds in the country. While the increased focus on Asian private equity has led to some bulky sums of money being raised for the region in recent years, the argument remains that GPs investing in Asia need to start providing returns if they are to see a surge in fund-raising for the region once again.
According to the Global Private Equity Report 2010, published by Bain & Company, private equity funds investing in the Asia-Pacific region have raised more than $300 billion since 2003. However, only about $100 billion has been deployed while the remainder remains un-invested, added the report.