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Interest in traditional energy ramps up

A survey of limited partners within the infrastructure asset class shows that traditional energy is the most popular sector as well as being more popular than it was a year previously. Traditional energy is of considerably more interest than renewable energy.

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Traditional energy and power is the area of investment attracting most interest from limited partners in the infrastructure space, according to The Infrastructure Market Review and Institutional Investor Trends Survey for 2012, published by placement agent Probitas Partners.

The survey reveals that 54 percent of investors say their firm is “actively interested in investments or funds focused on” traditional energy and power. This compares with a figure of 38 percent a year prior, indicating a strong upsurge in interest. Among what the survey defines as “experienced” investors, the figure is 59 percent.

The survey authors note their surprise that renewable energy scores significantly lower at 37 percent – making it the fourth-most-popular sector – even though “a number of funds are currently in the market specifically targeting that sub-sector”.

Water and waste management is on the radar of 48 percent of investors, followed by transportation at 44 percent. Opportunistic funds without a sector focus are the subject of attention for 39 percent of investors.

The survey also notes that social infrastructure – defined here as “social services” – is of little interest globally, with only 17 percent of respondents saying they were interested in it. But, while the sector is of very little interest in North America or Asia, in Europe the figure is 50 percent.

The survey canvassed the views of 75 senior investment executives within public and corporate pension plans, funds of funds, family offices, endowments and foundations, consultants and advisers, and others.