Australian unlisted infrastructure funds delivered a total return of 11.7 percent (before management fees) in the year to March 2013 compared with 10.4 percent in the year to March 2012.
The return in the first quarter of this year was also up – by some 50 basis points – compared with the previous quarter, according to the IPD Australia Quarterly Unlisted Infrastructure Index.
The year to March 2013 saw an increase in capital return from 7.2 percent to 8.6 percent compared with the previous year. Over the same period, distributed income return fell slightly from 3.0 percent to 2.9 percent.
The longer-term picture is even better. Over the 10 years to March 2013, the pre-fee investment return was 12.4 percent. The IPD report says that strong growth was seen from 2003 up to the global economic and financial crisis in 2008, after which there was a dip (but a “mild downside” in comparison with other asset classes).
Post-Crisis, investment returns recovered strongly initially, followed by a “a period of moderation with a slight softening in 2012”.
The report points out that the performance of unlisted infrastructure relative to other asset classes was particularly strong during the seven years to March 2013, with an annualised average return of 10.9 percent during that period.
“The recent investment performance by unlisted infrastructure highlights its attractive investment value proposition amongst core investment opportunities,” commented Dr Anthony De Francesco, managing director of IPD, a real estate benchmarking and portfolio analysis firm, in Australia and New Zealand.
The IPD’s index covers 20 Australia-domiciled unlisted infrastructure funds managed by eight different firms, covering 162 investments with a gross asset value of A$27 billion (€21.3 billion; $27.7 billion). Assets counted by the index are weighted 65 percent domestically and 35 percent offshore.