Asia top infra investment destination for 12 mths: survey

About half of investment consultants worldwide believe that Asia will offer attractive opportunities in the infrastructure space over the next 12 months due to the rapid pace of development in their emerging economies, according to a survey by research firm Preqin.

According to Preqin, which tracks private equity fund-raising globally, half of the infrastructure investment consultants surveyed believe that Asia will offer attractive investment opportunities during the next 12 months, while 47% view Europe more favourably.

Interestingly, 58% of the consultants planned to commit more capital to unlisted infrastructure funds over the coming 12 months than they did in 2010 and 22% plan to significantly increase their commitments in the same period.

"The study suggests that the outlook for the asset class is really positive. More money is likely to flow into the industry in the coming year and as our previous study of investors showed, almost two-thirds are planning to continue investing in unlisted infrastructure in the longer term," Preqin Infrastructure Data (Manager) Elliot Bradbrook said.

"That said, investors are still cautious following the downturn. "If fund managers are to be successful in attracting investments in these competitive times, they need to ensure that they offer attractive terms and conditions to their potential investors and satisfy the growing demand for improved reporting and increased investor interaction," he said.

The survey was conducted among 70 alternative asset investment consultants across the world in June, 2011.

Earlier, in February, a Preqin study had stated that of all unlisted infrastructure funds targeting a single emerging market, the highest proportion were focused on India.

The study had said there are currently 38 unlisted infrastructure funds with a preference for investment in India. Out of them, 25 have already held garnered $9.5 billion and another 13 are currently in the market seeking an additional $7.3 billion.

In addition, nine more India-focused infrastructure funds are expected to be launched by unlisted fund managers in 2011.

"The growing demand for infrastructure development in India over the coming years will require a huge amount of private sector investment and as such, unlisted infrastructure fund-raising and deal flow in India looks set to rise in order to compensate for the shortfall in the availability of public sector project financing.

"Although commitments in countries like India expose investors to a significantly higher level of risk/return, investors now recognise the need for diversification within their portfolios," Bradbrook had said on the February study.