Infrastructure Funds: a primer for wealth managers

Table of Contents

• DATAMONITOR VIEW
  • CATALYST
  • SUMMARY
• ANALYSIS
  • Orientation of the brief
  • There is a growing need for investment in infrastructure projects, and new ways to fulfill this need
    • Worldwide investment in infrastructure projects exceeds $1.9 trillion annually
      • Infrastructure funding needs are considerable,particularly in the emerging markets
    • Historically, funding came exclusively from governments,but private funding is increasing, creating a new asset class for private investors
      • More than $68 billion in public/private partnership infrastructure deals worldwide were generated in 2005-6 alone, and the outstanding market exceeds $400 billion
      • The UK has more than $111 billion in public/private partnerships
    • Ireland is among the country leaders in using PPPs to fund infrastructure projects
    • Australia' s private infrastructure investment market was boosted by superannuation reforms of the 1980s and 1990s
  • There is an increasing supply of infrastructure funds, but this may not be good for investors
    • Australia is a market leader in the launch of infrastructure funds
    • Today, Europe' s investors have at least 44 infrastructure funds to choose from
    • Stiff competition today for infrastructure assets is narrowing the opportunities for profitable investment
  • Infrastructure funds generally are best suited to institutional investors
    • The very long-term nature of infrastructure asset funds means that life companies and pension funds are the most suitable investors
    • There is, however, interest from European HNWs, which wealth managers are focusing on
    • Conclusion
• APPENDIX
  • Definitions
    • Public Private Partnership (PPP)
    • Private Finance Initiative (PFI)
  • Methodology
  • Further reading
  • 1O ECD (2006) Infrastructure to 2030.
  • 2 Risk Australia (2007) Rush for assets.
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
• List of Tables
  • Table 1: Global annual average infrastructure spending,2000-2030
  • List of Figures
  • Figure 1: Telecoms and water infrastructure projects account for three quarters of annual spending, annual average from 2000-2010
  • Figure 2: Europe dominates the PPP infrastructure market, 2007
  • Figure 3: Inn is free is the largest PFI investor in the UK, 2004-7
  • Figure 4: Transport will form Ireland' s largest PPP infrastructure sector in 2009-12
  • Figure 5: Listed infrastructure funds have grown dramatically on the ASX
  • Figure 6: Most infrastructure funds for sale in Europe are "equity funds"
  • Figure 7: Investors in Austria, Germany and Luxembourg have the widest range of infrastructure funds available to them
  • Figure 8: Infrastructure funds have a lot of business potential among HNWs in the UK and Nordic region
  • Figure 9: British, French, German and Nordic wealth managers plan to focus resources on infrastructure funds in the next two years
  • Figure 10: Infrastructure funds have the most business potential among Chinese and Taiwanese HNWs
  • Figure 11: Despite strong business potential among HNWs,Taiwanese wealth managers will not be focusing resources on this sector in the next two years