70% of institutional investors invest in infra or plan to do so

Written by Adam Cadle

20/11/2024

Around 70% of institutional investors globally invest in infrastructure or plan to do so in the near future, according to a study by Coalition Greenwich.

Current investment is highest in Canada, Europe and Asia – only 52% of the US institutions invest in or are considering the asset class.

According to the study, entitled 2024 Highlights on Infrastructure Investing Trends, institutions across these regions are investing in infrastructure for dramatically different reasons. While all institutions participating acknowledge infrastructure’s ability to make portfolios more diversified and resilient to inflation and volatility, 54% of institutions in the UK and 75% of investors in Asia ex. Japan report one of their top reasons for investing in the asset class is the opportunity to participate in powerful trends such as energy transition and digitisation. In the US, less than a third of infrastructure investors cite that opportunity as a reason to invest. In Canada, that share falls to approximately 15%.

There is an even bigger divide between investors in the US and Europe when it comes to questions of ESG. Almost 80% of investors in Continental Europe and 85% in the UK rank ESG criteria as 'very' or 'extremely' important in their infrastructure investment decisions. In the US, less than 15% of investors place that level of emphasis on ESG, and a full 40% of investors do not take sustainability issues into account at all when making decisions about how and where to invest in infrastructure.

“Attitudes toward ESG investing have been diverging for several years between Europe and the US and this research highlights the extent of the divide,” said Mark Buckley, global head of investment management at Coalition Greenwich.

“European infrastructure investors are looking to maximise both environmental impact and returns by centering their investment strategies around support for renewable energies and other ESG issues. Meanwhile, most US investors are investing for investment factors, completely ambivalent to ESG.”

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