Partners Group warns on brownfield infra returns

26 November 2019 - 12:00 am UTC

The growing amount of capital committed to the global private infrastructure market has driven a “material decoupling of valuations from fundamentals,” putting downward pressure on future returns, Swiss private equity firm Partners Group warned in its 2020 market outlook.

Growth in the sector has lifted asset valuations “to the upper end of historic ranges,” the report states, creating an attractive exit environment.

But record prices may prove problematic for core brownfield infrastructure assets for two reasons: regression to the mean could lead to disappointing returns, and assets lacking true “operational levers” are susceptible to disruption risk.

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