Drop in investor appetite for PPP

New research has found a significant reduction in appetite for PPP and PFI assets from investors.

According to figures compiled by consultancy Deloitte, the majority of infrastructure investors have been put off PPP/PFI assets because of the lower returns on offer, meaning the assets remain the domain of specialist PPP/PFI funds.

“It remains to be seen whether this is a barometer for potential investment in the UK government’s Pension Infrastructure Platform (PIP), which is seeking to attract £2bn of private sector finance for UK infrastructure projects,” the report added.

However, the report revealed that regulated utilities and transport will be two of the top sub-classes of infrastructure for investors in the next two years.

It also found that the UK, along with Germany and Scandinavia, remain the most popular geography for infrastructure investors, followed closely by North America and Australasia, while investor interest in India and China has waned.

“Many commentators were sounding the death knell for infrastructure as a specialised asset class a few years ago,” said Jason Clatworthy, partner in Deloitte’s infrastructure M&A team. “In fact, infrastructure investors have emerged stronger and wiser from the downturn and momentum is building as new investors look to enter the market.”