DOWNLOAD: Half of all investors under-allocated to infra and wanting more

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Infrastructure remains a safe haven for investors with nearly half of all institutional investors under-allocated to the asset class by 30 June 2023, suggesting there should be funding to be found for GPs in the latter part of the year.

This is according to Infrastructure Investor‘s H1 2023 Investor Report, based on our database of over 2,900 investor profiles.

Of the overall under-allocated institutional investors, 43 percent were in Western Europe, 29 percent in North America and 20 percent in Asia-Pacific. Conversely, 25 percent of all institutions were over-allocated, which could see valuations pressured on the secondary market.

The large proportion of under-allocated investors denotes a general trend of increased exposure to the infrastructure asset class in H1. Since January 2023, 38 percent of pension funds have increased their allocation and only 10 percent cut their exposure to the asset class.

This is also reflected in the historical average infrastructure allocation for the various institution types where, for the first time since 2019, no type of LP averaged below a 4.7 percent H1 allocation to the asset class.

While this could be a question of ‘needs must’ following the fall in valuations of fixed income and real estate assets against the more stable infrastructure valuations, the large number of institutional investors finding themselves under-allocated suggests that the appetite for infrastructure in actual terms is indeed on the rise.

Looking at the funds that attracted outsized allocations in H1, no fewer than 18 individual allocations of $200 million were registered. EQT Infrastructure VI had both the largest single allocation at $450 million from New York State Common Retirement Fund (NYSCRF) and a $300 million allocation from Oregon State Treasury. Brookfield Infrastructure Fund V had two $300 million allocations, one from NYSCRF and another from the Maryland State Retirement and Pension System.

In terms of strategies, there were out-sized allocations to everything from opportunistic to debt strategies, with six allocations to core strategies, five to core-plus and four to value-add.

Funds with an energy or renewable sector focus were the only non-diversified strategies to attract single allocations of $200 million and above.

Check out our interactive report above for the full breakdown of investor activity in H1 2023 and further insights the data reveals.

You can also download the report as a PDF HERE and download the data HERE.