Many infrastructure funds have relied on the tried and tested private equity model that is familiar to many investors. However, because the market is maturing, some concerns are being raised around issues such as fee structure, leverage, and information requirements that affect compatibility with the infrastructure proposition. A particular concern with the leveraged fund approach is the refinancing risk this creates. This will become critical in coming years, when leverage debt arranged prior to the global economic crisis becomes due for renewal. It is likely that investors will call for change in the model in response to this.
"Investors need to be principled in terms of - Hazem Shawki, Managing Partner, EFG Hermes Private Equity |