Latest Infrastructure Pulse Survey shows increasingly positive outlook in North America and Europe

GIIA is pleased to launch the results of the latest Infrastructure Pulse Survey for both the Americas and European markets, produced in partnership with Alvarez & Marsal.

Click here to read the Infrastructure Pulse Survey

The Q4 2021 Pulse Survey provides a track on market sentiment among infrastructure investors and insights on emerging trends and barriers to investment. Key findings include:

  • More funds are looking to deploy larger amounts of capital and realise one or more assets than at any time on the last 12 months, reinforcing the amount of deal activity in the market.
  • An increasingly positive outlook for European markets
  • Rising optimism around the US, Canada and other Americas
  • Negative sentiment around regulated utilities with unattractive regulatory regimes being seen as the highest barrier for investment in Europe
  • Europe seen as more negative than Americas across all of the ‘key barriers’ to investment
  • Communications Infrastructure remains the hottest sector

Infrastructure Pulse Survey Q1

GIIA is pleased to launch the results of the latest Infrastructure Pulse Survey for both the Americas and European markets, produced in partnership with Alvarez & Marsal.

The Infrastructure Pulse Survey provides a regular temperature check of investor sentiment in the sector as well as identifying emerging trends and attitudes from the investment community.

Key highlights from the 2021 Q1 Infrastructure Pulse Survey include:

  • An overall positive view of the fundraising environment in both Europe and the Americas
  • In Europe, investor sentiment remains strong towards the Nordics following increased deal activity in Q4, 2020 while in the Americas attractiveness for investment was stable or slightly higher than the previous quarter with Brazil showing the most significant improvement, albeit still with a slightly negative overall
  • In both markets investors were most bullish about opportunities in communications infrastructure, followed by sustainable energy generation.

Speaking on the release of the results GIIA CEO Lawrence Slade said while the ongoing global health pandemic continues to provide a challenging backdrop for investors, it was encouraging to see that sentiment remained positive.

“The profound impacts of Covid will be felt on the infrastructure sector for many years to come. However, as the world emerges from the pandemic, and with optimism stemming from the vaccine rollout, infrastructure can play a significant role in helping economies rebound as well as addressing new challenges around a changing climate and increasing digitalisation.”

Click here to read Infrastructure Pulse Survey Q1 – Americas

Click here to read Infrastructure Pulse Survey Q1 – Europe

CEO BLOG | Climate adaptation and resilience at the heart of infrastructure investment

GIIA CEO Lawrence Slade looks at the challenge of climate adaptation for global infrastructure investors. Earlier this morning, Lawrence joined the Infrastructure Panel at the Climate Adaptation Summit 2021. For more information about the CAS please visit https://www.cas2021.com/. Follow Lawrence on Twitter @Lawslade

 

GIIA members own and operate infrastructure assets around the world in a range of sectors that serve millions of people every day. Whether it is providing the infrastructure to get them to and from work, connecting them to the digital world, powering their homes and offices, delivering clean, safe and reliable drinking water or providing the necessary social infrastructure that supports their communities, GIIA members invest in a diverse range of essential infrastructure.

Despite the stark differences between these assets and investments, one common theme does apply to all. Namely, how to deal with climate risks.

From water companies like Yorkshire Water who set about increasing flood resistance through the construction of reinforced pump station walls and improved drainage systems to Caruna Energy rerouting electricity cables underground to ensure the continued supply of electricity in adverse weather, GIIA members are recognising and adapting to a changing global climate.

 The challenge of climate adaptation is no longer viewed, in infrastructure investment circles, as something extraneous to core business risks, but instead is now a vital component of any risk mitigation strategy.

Indeed, research by the National Institute for Building Sciences estimates that for every $1 invested in climate resilience saves $6 in future economic disruption from extreme climate events.

Recently GIIA, in partnership with Marsh & McLennan, released a report looking at climate risks for infrastructure investors that recommended investors employ three levers to defend their assets against climate risk: namely –

  • Using modern technology for climate focused scenario planning to predict future outcomes;
  • Considering key decision checkpoints in infrastructure asset life-cycle and timing climate resilience interventions appropriately; and
  • Using stakeholder engagement to proactively manage interdependent risks across an asset’s ecosystem.

While climate change has forced a structural rethink of risk profiles within the sector, this has led to an increased focus on climate resilience and adaptation strategies which, ultimately, delivers improved reliability for those millions of people who rely on today’s infrastructure in their day to day lives, and of course look to the sector to provide the clean, resilient infrastructure for future generations.

New Infrastructure Pulse Survey

GIIA, in partnership with Alvarez & Marsal, is pleased to launch the new GIIA Infrastructure Pulse Survey for both the European and Americas markets. This quarterly survey aims to provide a regular temperature check of sentiment in the sector and to monitor emerging trends.

Click here to view the results of the Europe Infrastructure Pulse Survey

 

Click here to view the results of the Americas Infrastructure Pulse Survey

Speaking on the release of the Survey, CEO Lawrence Slade said:

“We are excited to work with Alvarez & Marsal on the Infrastructure Pulse Survey which will monitor some of the key trends and issues affecting the infrastructure investment space in both Europe and the Americas. We are confident this will become a valuable market tool in understanding what is happening in the sector.”

Against a backdrop of Covid-19, a number of interesting common themes emerged from the first survey:

  • Most respondents raising capital expressed a neutral or marginally positive view of the
    fundraising environment.   For those investing new capital, almost three quarters of respondents indicated that infra debt markets remain favourable for funding of new infrastructure deals in both geographies.
  • In terms of general outlook and views of the impact of Covid-19, respondents highlighted the only positive impact of Covid-19 was in communications infrastructure (due to the increased criticality of connectivity as more work from home), which continued the overall positive outlook for the sector.  Unsurprisingly, the most negative outlook was noted for airport transactions and oil & gas related midstream assets.
  • Respondents indicated that the most positive outlook in Europe was for the Nordics, Iberia and Germany, whilst in the Americas the most positive outlook was in the USA. The most negative sentiment was reserved for Greece/Cyprus, Eastern Europe, and Mexico.
  • ESG is emerging as an important consideration for investors and their LP’s across both the Americas and Europe.  Covid-19 and other events in 2020 are likely to accelerate the ESG agenda with a flow through to investment criteria.

Results from the next quarter’s survey are anticipated in mid-October.

Financing America’s Infrastructure Future

GIIA CEO Lawrence Slade spoke about the opportunities for US States to drive inward investment through partnerships with private infrastructure investors during a panel discussion convened by the National Governors Association on 24th June.

The Infrastructure Financing Summit, a centre-piece of National Governors Association Chairman, Governor Larry Hogan’s year-long Infrastructure: Foundations for Success initiative, focused on leveraging private sector investments, and how governors can help ensure that their states have access to the full range of infrastructure financing options.

Joining the panel with Lawrence were Governor Doug Ducie, Arizona, Governor Ralph Northam, Virginia and Global Head of Corporate & Business Development for Cintra, Carlos Ugarte.

Noting that private infrastructure currently has a proportionately smaller role in the US when compared to other markets around the World, Lawrence said there are multiple funding models that could be deployed to suit specific circumstances for individual states, including more rural states.

“Working with private investors will allow individual States and Governors to access significant funding that comes with unrivalled experience about how to economically manage, develop and operate both existing and new infrastructure and responsibly add value to communities,” said Slade.

Watch the full panel here – Financing America’s Infrastructure Future (Panel 1)