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| 1 minute read

Infrastructure takes hold of the Secondary Market

The secondaries market has boomed over the last decade, with 2021 proving to be the strongest year for fundraising and transaction volume that the market has ever seen. Although this growth has levelled out slightly over the last year, secondary investments have become increasingly common within certain industries - one such being the Infrastructure sector. Investment firms such as Hamilton Lane, Ardian and Brookfield have all been strong players in the secondaries market, however, it has been a recent evolution to extend this capability into Infrastructure Investments. Global powerhouse Macquarie Asset Management has recently expanded efforts into this market as they build out a team solely dedicated to this function.

GP-led transactions continue to lead the infrastructure secondaries market as this is still a comparatively young market for investors who are not yet ready to exit investments. That being said, LP-led secondaries are on the rise within this sector as investors over-allocation within portfolios looks to be rectified. Equally, buyers appetite is steadily on the rise as visibility, mitigation of the J-curve, and an entrance to private market investments following public market volatility are priorities. Therefore, it is predicted that the Infrastructure Secondaries market will continue to grow across both GP-led and LP-led deals.

Just over one-quarter of respondents to Infrastructure Investor’s LP Perspectives Study 2023 plan to invest in infrastructure secondaries funds during the next 12 months, as investors react to a busy year for secondaries fundraising.  This flurry of activity reflects the growing maturation of an infrastructure secondaries industry that has previously been dominated by individual institutional investors with limited involvement from specialist funds.

Tags

private markets, infrastructure, secondaries, investment

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