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
Retailisation of private markets such as evergreen funds may seem like appealing options for wholesale and retail investors, but providers risk undermining trust if their products are unclear.
Ethical investment manager Australian Ethical has seen its funds under management rise by a third over FY25 to close out the year at $13.9 billion.
BlackRock Australia’s head of intermediary distribution James Waterworth has taken up a new distribution role at an alternative asset manager, while Antipodes has hired a distribution director.
BlackRock’s iShares ETFs have reported a record first half for inflows, gaining US$192 billion in the past six months, to see overall ETF assets under management rise to US$4.7 trillion as it launches its first active ETF in Australia.
