Two in three senior investment professionals (63%) expect to raise their exposure to infrastructure over the next three-to-five years, researchers have found.
The insight comes in the PM700, IFM Investors’ annual barometer of 700 senior investment professionals across 19 countries.
IFM Investors said its research indicates infrastructure has emerged as an “emerging megatrend” alongside others such as energy security and digitalisation.
Seven in 10 investors spoken to (71%) believe investing in long-term megatrends such as artificial intelligence, the energy transition and demographic change will be ‘essential to achieving future return objectives’.
Other notable findings included more than half (55%) rank inflation among their top three portfolio risks, while 47% believe macroeconomic factors will have the greatest impact on their private markets investments.
In terms of accessing megatrends like infrastructure build-outs, the researchers found a high level of interest in private markets, with 61% saying they believe private markets are better than public for accessing megatrend exposure.
The interest was not limited to the equity side, as more than half of the investors (55%) plan to increase infrastructure debt exposure over a three to five year period.
IFM Investors chief strategy officer Luba Nikulina said: “Investors around the world are facing the balancing act of portfolios that can remain resilient through inflation, geopolitical uncertainty and rapid structural change while also continuing to deliver the returns their stakeholders require.
“What PM700 shows is investors are no longer accepting the trade-off between resilience or growth and are increasingly expecting their portfolio to deliver both, one of the main reasons behind infrastructure continuing to be a favourite investment target globally.
“We’re also seeing an alignment between the world’s largest investment themes and infrastructure themes,” Nikulina continued.
“Artificial intelligence requires data centres, data centres require power, electricity networks and fibre connectivity while energy security requires large-scale investment in generation, transmission and essential infrastructure.
“It also signals that as governments and investors look for ways to fund the infrastructure and energy systems that economies increasingly depend on, trusted long-term capital is becoming more important than ever.”
See also: FundCalibre’s McDermott: Where next for the US market?
