Europe at the centre of unlisted infrastructure growth – Preqin

GLOBAL - Europe stands to see the most investment capital deployed by infrastructure fund managers, with 47 Europe-focused funds targeting an aggregate $33.3bn (€23.6bn), according to Preqin.

The data analysis company said Europe was widely recognised as the centre of the unlisted infrastructure industry, and its latest report showed the volume of capital earmarked for the continent outstripped the US, Asia and the 'rest of the world' (RoW) markets.

Although greater in number, the 51 funds focused on Asia and RoW were targeting a smaller investment volume of $26.9bn. North America-focused funds, meanwhile, were targeting a combined $30.6bn.

The report also showed that 126 infrastructure funds with a primary focus on Europe had entered the fundraising market since 2004, of which 79 had closed, raising an aggregate $51.3bn.

In 2011 to date, three Europe-focused funds have held a final close, raising an aggregate $1bn, while 16 more Europe-focused infrastructure funds are expected to come to the market this year.

Preqin also found that UK-based infrastructure firms were dominating the European market, with 48% of Europe-focused funds managed by UK managers. Australia, meanwhile, was the only non-European nation home to a firm raising capital for a Europe-focused fund.

Elliot Bradbrook, infrastructure data manager at Preqin, said: "The level of risk associated with investment in emerging markets, and the reluctance of the US government to allow greater private sector investment in US-based infrastructure projects, means Europe will likely remain the centre of activity for the sector in the coming years.

"There are currently 47 Europe-focused infrastructure funds in market targeting $33.3bn in institutional investor capital, and with over 490 investors looking to make investments in Europe, the amount of private capital available for investment in European infrastructure assets looks set to grow.

"In the wake of the financial crisis, more investors are looking to create stable and diversified investment portfolios, and fund managers are seeking profitable long-term deals - the European infrastructure market will continue to provide both."