Asia Infrastructure Investment Returns Are Shrinking (FinanceAsia)
Asia’s infrastructure needs have long attracted interest from private equity firms and other investors; but according to a lengthy article in FinanceAsia, drawn-out development and construction timeframes along with eroding returns have prompted some investors to look at smaller projects, particularly in energy.
Greg Karpinski, the co-head of energy, resources and infrastructure at SCB Principal Finance, a unit of Standard Chartered Bank, told FinanceAsia that there is a growing interest in smaller infrastructure investments. His firm is now targeting projects of less than $500 million, where they are able to make equity investments of $20 million to $200 million.
Investors and advisers also said that while large-scale infrastructure investments deliver returns on equity of 9% to 14% (falling to the lower end of that range in recent years due to the worsening economic climate), smaller infrastructure returns can be 15% and higher. These returns are driven in part by increased cash flow and the technical risks associated with smaller projects that use non-conventional fuels and technology.
To read the whole article, Investors rethink as infrastructure returns shrink, go to the website of FinanceAsia.
- Nikko AM’s Sartori: Best Buying Opportunities in Asia in My Career (AFR)
- Wynn Palace Will Outperform Other Macau Casino Developments (Fitch)
- Russell Frontier Markets Equity Fund’s Manager Sees Neglected Gems (WSJ)
- Investor Sentiment Survey: What Emerging Market Investors Think (Franklin Templeton)
- Are There Greater Opportunities In Asia’s Frontier Markets Than in China? (FT)
- Chinese Tech Stocks Down But Not Out As Sentiment Shifts (FA)
- Private Equity Firms in Southeast Asia Are Cashing Out Faster (WSJ)
- Is the Thailand Coup a Major Threat to Asian Equity Funds? (FE Trustnet)
- Macau Casino Stocks are Entering a “Multi-year Earnings Decline Cycle” (GGRAsia)
- GAM’s Love: Emerging Markets Might Double Your Money Over Four Years (FE Trustnet)