Australian institutional investors have been increasing their exposure to listed equities, according to one of the country’s largest fund managers of unlisted infrastructure.
IFM Investors announced this week that it experienced a record year of inflows during past 12 months, taking its funds under management to AUD107bn (€67.8bn).
But while global investors have continued to show strong appetite for unlisted assets, there has been a shift in sentiment among Australian investors to listed equities, according to IFM chief executive Brett Himbury.
Asked by IPE Real Assets whether investor demand was being affected by high prices across private markets, Himbury said: “We are very focused on assessing value at the enterprise level. And we have been able to continue to find value.”
Infrastructure still represents the largest part of IFM Investors, at AUD47.8bn. But inflows into its listed equities business has seen IFM Investors go from the seventh-largest Australian equities manager to the third-largest.
Earlier this week, the International Forum of Sovereign Wealth Funds published a report that seemed to show a pullback from private markets among large, state-owned investors in favour of listed investments.
Himbury said IFM Investors was able to continue to find value in private markets like infrastructure, partly because it could access proprietary bilateral deals with operators and strategic partners in Australia and around the globe.
But he also delivered a note caution about the potential for greater government regulation in areas like energy prices.
The Australian Competition and Consumer Commission recently called for greater powers for the country’s energy regulator.
“It is a threat globally and not just in Australia,” Himbury said. Part of the push for greater regulation was down to governments becoming fiscally constrained and looking to generate higher revenues.
The key, he said, was to understand the source of the problems and to mitigate the risk. For this reason, IFM is looking to pursue more “GDP assets”, Himbury said, meaning ports and airports, as opposed to regulated assets such as public utilities like electricity.
But there are still “a lot of regulated assets” around that would that present investment opportunities, he added.