Infrastructure deals hit record so far in 2015 – Preqin
The average size of infrastructure deals has reached a record of $626m (€567m) for transactions as at 3 August 2015, said consultant Preqin, specialised in alternative assets.
Preqin’s research highlights average deal size has increased by 56% between 2013 ($401m) and 2015 year-to-date.
However, it spotted that the number of deals taking place each year has “fallen notably in three years”, from 1,056 in 2013 to just 325 so far in 2015.
Preqin explained that the majority of infrastructure investors now list valuations as their primary concern for the infrastructure market.
Among other findings, the research shows that average deal sizes have hit record highs in all geographic regions in 2015 so far. Deal size is up 42% in Europe compared to 2014.
Also the aggregate deal value is not expected to meet 2014 levels by the end of the year . “Estimated aggregate deal value reached $435bn (€394.1bn) in 2014, yet the aggregate deal value for 2015 ytd is only $204bn (€184.8bn),” Preqin underlines.
Andrew Moylan, head of Real Assets Products at Preqin, commented : “Average infrastructure deal sizes have reached all-time highs so far in 2015, experiencing significant increases since 2013. However, this growth has not been completely linear across the industry. Transactions in the more developed infrastructure markets of North America and Europe have seen the largest increases in average deal value.
“Furthermore, the appetite for the favourable characteristics of brownfield sites among investors has driven prices for these assets up at a faster rate than infrastructure at both the greenfield and secondary stages.
“What worries investors is that capital committed now may not deliver the strong, stable returns to which they have become accustomed. Only time will tell whether large asset prices will have an effect on the overall performance of unlisted infrastructure funds currently investing capital.”