DNA of a Manager Search: Infrastructure

While unlisted infrastructure has become a more significant component of pension fund, endowment and sovereign wealth fund portfolios over the past decade, investors today face an increasingly challenging and diverse opportunity set.

The past two years have seen the emergence of ‘mega-funds’ such as Brookfield III, Global Infrastructure Partners III and Blackstone’s mammoth new Saudi- backed vehicle, as well as a proliferation of sector-specific or region-specific players, leading to greater diversity than ever before. Meanwhile, fundraising has slowed significantly in 2017, although
‘dry powder’ still rose by 10% in the first half of the year (Preqin).

As available returns have compressed, managers are increasingly using a blend of approaches across the risk-reward spectrum – with a broad trend towards taking on more risk and different types of risk – in order to target performance in line with recent years.