Has infrastructure investing risk reached a tipping point?

08 November 2017 - 12:00 am UTC

That’s the unspoken question lurking behind a lot of the market developments Inframation News covered over the last few weeks. 

Some have taken heart from the fact that some governments like that of the Netherlands, whose plans to procure a new EUR 2bn infrastructure programme as a PPP we revealed last month, are still providing a deal pipeline. But the lack of greenfield opportunities, especially in North America where market participants have begun to buckle under the weight of expectation around a long-predicted P3 bonanza, has for sometime now been driving the ever increasing hoards of capital raised for infrastructure investment into other areas. And not always in a good way.
As we reported last month, there have already been some very radical shifts in investment strategy with greenfield investors targeting brownfield and the stretching to breaking point of investment mandates traditionally tied to traditional “core” parts of the asset class and “safe” markets. Some of this is no doubt down to the need to evolve market assumptions. At our European Infrastructure Finance Summit in Paris last month, for example, speakers on a panel discussing Smart Cities set out how infrastructure investing is being rethought as part of the “internet of things”. But we have also started to see investor reengagement with markets in some parts of Asia and Latin America. As we reported in October, developers and investors like Eiffage and Ardian are expanding their presence and as our New York North American Funds and M&A reporter Jonathan Carmody will examine this month, Canadian institutions are growing their exposure as well. We will also be taking an especially close look at Brazil this month with an updated Country Factbook and a piece on the country’s privatization program planned.