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Unlisted infrastructure AUM to grow at a CAGR of 4.5% from $639bn in 2020 to $795bn in 2025

Wednesday, November 11, 2020

Laxman Pai, Opalesque Asia:

Preqin forecasts that unlisted infrastructure assets under management (AUM) will grow at a CAGR of 4.5% from $639bn in 2020 to $795bn in 2025.

Among investors surveyed by Preqin, 56% expect to increase their allocations to infrastructure in the next five years, with just 7% expecting to lower allocations.

Pooled vehicles will account for the bulk of the increase, with 59% of investors intending to use this route more and 36% the same amount, followed by co-investment, which 48% of investors expect to do more of.

Dry powder's share of AUM has fallen from 42% in 2010 to 35% at the end of 2019, a testament to fund managers' success at sourcing opportunities as the asset class has grown.

According to the report, many investors value the defensive characteristics of infrastructure. Contracted infrastructure assets have been an anchor in the storm in recent months, particularly when compared to other real assets such as real estate.

Superannuation schemes have held a long-term preference for infrastructure, with allocations staying above 5% for the past 10 years, reaching 6.3% in 2020, according to Preqin Pro. Public pension funds have increased their allocations to infrastructure, from an average of 2.1% in 2018 to 2.7% in 2020, in part reflecting a policy mandate to increase aggregate infrastructure investment.

Private/corporate pension funds are holding steady on their allocations at 2.0% in 2020, though this will increase if th......................

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