Core-focused PEs stay bullish

New Delhi, Dec. 25: Infrastructure focussed private equity fund raising is likely to rise next year as investors consider it a safer option that will balance their investment portfolio, according to the global research firm, Preqin.

In 2009 to date, just 10 infrastructure funds have reached a final close, raising an aggregate $6.2 billion. This represents an 82 per cent decline from $34 billion capital raised in 2008, Preqin said.

However, investors are expected to resume investment in infrastructure funds in 2010 as they consider investment in the asset class a hedge against other options. “Many investors plan to resume investing in 2010, and infrastructure’s low correlation to other asset classes, combined with its inflation hedge characteristics, makes it an appealing investment,” it said. As investors were forced to assess their existing portfolios during 2009 following the global economic meltdown, a majority of investors stated that they had not made any new commitments in 2009.

“The financial crisis has filtered down through every level of the infrastructure asset class, affecting not only investors and fund managers, but also the number of projects reaching financial close in 2009,” Preqin said.