Infrastructure  

Investor appetite for infrastructure on the up

Investor appetite for infrastructure on the up

Investor appetite for infrastructure investments is seemingly following an upward trend as advisers claim their clients favour the sector in the face of ongoing economic uncertainty. 

According to research from fund house Time Investments client sentiment towards renewable energy, utilities, transport and logistics and social infrastructure is growing. 

A survey of 50 UK-based advisers last month found 42 per cent had clients now investing in infrastructure, with 34 per cent witnessing an increase in exposure to this area over the past 12 months. 

Almost two thirds of the advisers, at 60 per cent, predicted investment in the sector was set to increase in the coming year, with the majority of investors expected to favour UK based infrastructure over its global counterpart. 

Respondents pointed to investor concerns surrounding economic uncertainty, the Brexit deal, ongoing stock market volatility and a preference for predictable income as drivers for the trend. 

Stephen Daniels, fund manager of TIME:UK Infrastructure Income, said: "Investors are increasingly turning to infrastructure investments which offer attractive risk-adjusted returns versus equities and fixed income investments.

"The government’s commitment to infrastructure spend will also make the sector even more attractive."

Time launched its own open-ended UK infrastructure income fund two years ago, which in the 12 months to the end of January returned 9.68 per cent. 

In a report published by investment consultancy Bfinance in February, listed infrastructure was found to have experienced "dramatic growth" in the past decade alongside the emergence of hybrid strategies combined with real estate.

The report found this rise had been driven by push factors, such as slow deployment in private markets and a lack of diversification, and pull factors including greater breadth and track record of strategies.

rachel.mortimer@ft.com 

What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.