Political risk hinders infrastructure market
More than one-third of infrastructure investors are willing to invest more than $2 billion into infrastructure projects but many were unsure the market had enough opportunities, a report found.
The ‘Australian Infrastructure Investment Report', but Infrastructure Partnerships Australia (IPA) and Perpetual found there is a significant amount of money available to invest in Australian infrastructure but there are significant barriers to entry.
While 95 per cent of infrastructure investors are likely to invest in Australian opportunities in the near future, 68 per cent cited political risk as their greatest concern.
The report found 50 per cent of respondents were ready to invest more than $1 billion into the market, but 42 per cent said the Australian market is unlikely to provide sufficient opportunities in the near term.
IPA chief executive, Brendan Lyon, said "we need to dial up the number of projects and dial down the political risk".
"Australia is rightly regarded as one of the most stable and secure places for infrastructure investment, but the cancellation of Victoria's East West Link and Queensland's asset sales have clearly spooked many investors," Lyon said.
Perpetual Corporate Trust, general manager of corporate client services, Andrew Cannane, said there needs to be an increase the visibility of future projects and the value they can provide as there is significant weight of capital ready to be deployed into local infrastructure.
"These insights suggest there is a net-negative sentiment among investors about the depth of the pipeline, with most thinking Australia will have too few infrastructure investments, for the scale of investment seeking exposure to Australian assets," he said.
Recommended for you
Magellan has closed out the financial year with funds under management approaching $40 billion and outlined its estimated performance fees.
First Sentier Investors chief executive, Mark Steinberg, is set to depart the asset manager after seven years.
Metrics Credit Partners has completed the acquisition of Taurus Finance Group and BC Investment Group as it looks to launch consumer lending arm Navalo.
AMP has announced to the ASX that it is being sued by property fund manager Dexus regarding the sale of its real estate and domestic infrastructure equity business.
