Investor allocations in infrastructure expected to increase in 2015

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North America (29%), closely followed by Europe (26%), were voted the most likely regions for infrastructure investment in 2015, revealed a survey of delegates that attended the annual 'Outlook for European Infrastructure Investment' roundtable hosted at our London office and organised by Infra Finance (INFIN) at the end of last month.

The event, attended by over 150 of Europe’s leading energy and infrastructure professionals, also revealed that over a third of voters (67 %) generally felt positive about the outlook for infrastructure investment as a whole.

When looking at the financing of infrastructure deals in keeping with current trends, almost half of respondents (42%) anticipated commercial bank debt to be the debt product most likely to be deployed in infrastructure deals/refinancings over the coming year.

Other main findings included:

  • Renewables (31%) and transport (30%) were viewed as the sectors expected to be the most active in terms of infrastructure deals in 2015;
  • Social infrastructure (6 per cent) and telecoms (2%) were the least likely choices;
  • Brownfield regulated infrastructure (27%) and brownfield unregulated infrastructure (26%) were voted as the infrastructure asset categories likely to yield the most infrastructure deals over the coming year, followed by greenfield PPPs (21%), demonstrating the perceived difficulty in getting greenfield projects off the drawing board; and
  • A lack of deal pipeline/assets (49 per cent) followed by political interference/political risk (27%) and asset over-valuation (19%) were seen as the biggest threat to a sustained flow of infrastructure deals in 2015.

The results demonstrate that infrastructure investor sentiment towards the market remains strong, in fact, even more so than at last year’s event. Investors see their allocations increasing and there remains a strong appetite for renewables and transport assets.

The area the audience expressed most concern with was pipeline - more deals need to come to market, especially in Europe. Even with the proposed plans to launch a EUR 315bn investment plan in the EU’s 2015 budget, there is still a lack of clarity on the detail behind the investment plans and linkage to a pipeline of credible and investible infrastructure projects.

Read the full survey results.

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