Foreword

Welcome to the fourth edition of our analysis of the infrastructure investors market.

As with our previous editions, we have interviewed a wide cross-section of infrastructure investors throughout Europe, and our thanks go to the investors that have contributed to our survey.

When we last conducted our survey in 2013, the sector had successfully weathered the economic storm, and investors had a clear focus on core infrastructure assets in the most established jurisdictions for infrastructure investment – particularly in Western Europe. We also saw a shift in the competitive landscape in this marketplace, with direct investors increasingly focusing on these same core assets.

Today, the results of our survey show this trend continuing, with direct investors now bedded in to the core infrastructure market in Western Europe. Infrastructure funds are having to become increasingly innovative in both their deal sourcing and their investment theses to be in a position to acquire assets that will produce their target returns.

Because of the increasing impact of direct investors in the market, investors have scaled back their target returns, but continue to perform well against these targets. In our 2013 survey, some thought that this might lead to departures from the market, however it appears that infrastructure funds have adapted well to these challenges.

One clear message coming from the survey is that renewables are becoming increasingly popular with investors as an asset class, although there have been some significant regulatory changes in this sector that have impacted returns. Investors are keen to see the regulatory environment stabilise for renewables assets and more broadly across the infrastructure market.

The debt markets remain buoyant, with good access to debt capital at competitive prices and terms. We have also seen infrastructure funds move into the debt market, with a number having raised specific infrastructure debt funds primarily focused on junior/ mezzanine lending.

Exits have become more prevalent, and we expect this trend to continue, with first generation funds coming towards maturity and market conditions seen as positive for exits by infrastructure funds with high quality assets currently demanding high prices.

Overall, we are happy to say that the infrastructure asset class continues to perform strongly and provide stable secure returns. We expect this to continue through a period of more steady evolution in the infrastructure investors market over the years to come.

So in conclusion, a positive horizon on the road ahead.

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