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O ver the past decade, investors have sought higher returns, resulting in a move toward core-plus and value-added strategies among closed-end funds, and away from core strategies, according to the Infra- structure Investor Trends: 2018 Survey Results, an annual survey by Probitas Partners. On an annual basis, Probitas Partners surveys insti- tutional investors globally to determine how their interests in and perspectives on infra- structure have developed. Highlight of the survey findings include investors' greatest fears — too much money flooding in at the top of the market — but despite investors' largest fears, their appetite for infrastructure remains strong. "Appetite for infrastructure remains strong . . . 91 percent of investors report that they will either maintain or increase their investment pace over the next year," stated the survey. Investors are also seeking higher returns in a market where returns are under pres- sure, resulting in continuing shifts in inter- est toward value-added funds and away from core. ere was also some decline in interest in energy and power exposure in 2018 and lastly, investors are less interested in pub- lic-private partnerships (PPP) than they are in independent projects. In addition, infrastructure debt funds have been a more important part of the market since the global financial crisis, states the sur- vey, though debt fundraising in the first half of 2018 was weak. Respondents are more positive going into the next 12 months than in 2017, indicating that their appetites for infrastructure invest- ments will increase, with North Americans feeling this slightly more strongly. All of the active infrastructure investor respondents indicated that they were committing to closed-end infrastructure funds, and co-in- vestments and open-end funds also had a sig- nificant number of adherents, while there was little interest in funds-of-funds. For the few respondents who were not actively investing in infrastructure, 40 percent felt that the average duration of the invest- ments was too long for their needs, a significant change from 2017 when 44 percent believed the return profile was unattractive. e Probitas Partners pool of survey respon- dents was made up of a significant number of insurance companies, consultants, funds-of- funds, and public pension plans, making up 79 percent of the respondents. More than 50 per- cent of respondents were headquartered in the United States, with 17 percent from Europe and 22 percent from Asia. And more than 40 percent are active investors in the sector, with five years or more of experience, with another 22 percent being active for at least a year and a further 22 percent being consultants whose clients have a variety of levels of experience. Jody Barhanovich is a reporter with Institu- tional Real Estate, Inc. Higher returns, please Investors move toward core-plus, value-added strategies among closed-end infrastructure funds INFRASTRUCTURE Investment Strategy 21 REALASSETS ADVISER | D E C E M B E R 2 0 1 8