Institutional Real Estate, Inc.

nstItutIonal Real estate letteR people data insights Products Publications: All of our publications have a digital-first strategy. You always will see the content from these publications on our website first. Our website serves as the hub for the latest industry news and happenings. The Institutional Real Estate Letter: featuring regional editions for the Americas, Europe, Asia Pacific Institutional Investing in Infrastructure: A Publication of Institutional Real Estate, Inc. Inst itut ional Investing in Infrastructure Volume 6, Number 3 ISSN 1941-3831 March 2013 Inside 8 INVESTMENT NEWS Industry news and notes 13 SECTOR PROFILE Australian infrastructure 18 and Australia. INVESTOR PROFILE Oregon Investment Council 21 CLIMATE REPORT Numbers, quotes, facts and figures about climate's effects on infrastructure 23 MARKET PULSE Infrastructure numbers, quotes, facts and figures 24 SHOP TALK A review of the discussions at the 2012 I3 Editorial Advisory Board meeting Our flagship publication The THE InstItutIonal Real estate letteR A S I A PA C I F I C Institutional Real Estate Letter started Let's Make a Deal Infrastructure Investors Focus on Putting Money to Work by Mard Naman Investors have been anticipating rare opportunities to scoop up infrastructure assets as companies and governments, wrestling with declining economic growth and revenues, decide to sell assets to raise cash. Has money been deployed in the past two years, or is there a lot of cash still sitting on the sidelines? " B asically, both," says John Veech, head of Americas investing for Morgan Stanley Infrastructure. "The infrastructure investing community has deployed substantial capital into key infrastructure verticals over the past several years. That said, there is still considerable dry powder available for appropriate transactions." Some believe there may be too much capital chasing too few deals, and this will lead to inflated prices, with some funds desperate to get capital invested before they have to return it to their clients. So far, this does not appear to be the case. "There is not too much capital chasing too few deals, though some fund managers are less disciplined than others," says Mark Weisdorf, head of infrastructure investments for J.P. Morgan Asset Management's Global Real Assets group. "The market is always competitive, but the level of competition really depends on the type of transaction being considered," adds Veech. He says that assets that are "pristine" are often priced to perfection, but Morgan Stanley Infrastructure seeks out assets that need some level of operational improvement in order to add value or de-risk the investment. The need for hands-on operational capabilities often limits the number of potential buyers for an asset. Interestingly, Veech says, in many cases, for assets with higher valuations, it is not the closed-end funds (which would have to return uninvested capital to investors) that are setting the price. Instead, he has seen entities that do not have the constraints of time, such as pension funds and publicly traded entities, actually being the more aggressive and, therefore, price-setting entities. So rather than any urgency to get capital invested, he believes it is the characteristics of the assets — simple and pristine assets that appeal to a broader universe of buyers versus assets requiring operational enhancements, which appeal to a smaller universe of buyers — that are the bigger drivers of valuation. Danny Latham, head of infrastructure investment – Europe for Colonial First State Global Asset Management in Australia, sees greater competition in the larger deals. "To a degree this is driven by the increasing number of large institutional investors pursuing direct or co-investment style deals," Latham says. Many investors who are seeking co-investment deals tend to have small investment teams and, therefore, have less access to investment opportunities. "There is a tendency for those investors to pursue larger, more visible deals, which by definition increases the competition for those deals," Latham explains. He further adds: "Infrastructure is a long game not a short-term play. From a macro perspective, there is a fundamental shortage of capital to meet the enormous investment required to replace and refurbish the developed world's infrastructure stock. There is a short-term timing mismatch." LOTS OF ENERGY, LOTS OF ROOM FOR GROWTH The energy sector in the United States is one area where investment managers have been putting money to work and where there has been a lot of competition for deals. Is this a bubble in We also have the only publication catering to institutional investors who have invested in infrastructure or are exploring the asset class for the future. it all nearly 25 years ago. It is written Real Assets Adviser: for the investor, but by reading it, This is the only real assets investment publication advisers and other service providers catering to wealth advisers to individual investors, gain a competitive edge by truly educating them while helping them stay current understanding how these investors on the latest developments covering all aspects think and strategize. Now it has impacting advising clients on the real assets sister publications covering Europe, investment space, both on the listed and unlisted Asia Pacific and Australia, as well Road to recovery China's recovery affects Asia and the rest of the world side of the markets. Fact or fiction? What investors need to know — and do — about the affordable housing market in China SPECIAL CHINA EDITION Rebalancing act Uncertainty rules as China attempts to shift from investment-led to consumption-led growth April 2013 A publication of Institutional Real Estate, Inc. www.irei.com THE InstItutIonal Real estate letteR EUROPE A two-way street Property capital flows traverse Europe and Asia Same old, same old Real estate markets will continue in the same vein this year Quality and quantity Benchmarks: real estate investors need numbers and need someone to crunch them April 2013 A publication of Institutional Real Estate, Inc www.irei.com as supplementary reports including European Real Estate Quarterly and The Asian REIT Report. Institutional Real Estate Newsline (IREN): Online Real Estate and Infastructure Fund Database: Our database of real estate and infrastructure fund offerings and commitments has been built over the past decade to be one of the best in the IREN is a daily news source distributed to subscribers via our website and daily Now, this unparalleled industry resource is available eblasts. If you are looking for an easy and IREN industry, but access was limited to sponsor firms. to subscribers, at any time, online. The database cost-effective way to stay on top of industry news, contains more than 4,500 searchable global real this publication won't let you down. We've done the estate funds, including more than 800 funds actively analysis, and IREN continually breaks more news trying to raise a combined $248.9 billion in capital. to the industry than its competition. In addition, the database includes more than 400 global infrastructure funds.

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