J.P. Morgan Asset Management Says Opportunity In Core Infrastructure Is Too
Good To Last
-- New research piece describes impact of increased demand on asset class --
NEW YORK, May 2, 2013
NEW YORK, May 2, 2013 /PRNewswire/ --J.P. Morgan Asset Management asserts in
a new research piece titled "Too Good to Last" that while investors are
primarily drawn to infrastructure for its income and lower volatility, early
movers are also likely to enjoy outsized capital appreciation over the near to
mid-term as the demand for infrastructure assets grows.
In this new report, Mark Weisdorf, portfolio manager, J.P. Morgan Asset
Management OECD Infrastructure Equity, predicts that the early mover window
will close over the course of the next few years, with discount rates
compressing by 100 basis points or more. He explains:
oCore infrastructure currently offers a return that appears more than
commensurate with its relatively low risk profile, suggesting the returns
may moderate as risk-return perceptions evolve.
oDemand from institutional investors is likely to increase since U.S.
pension plans, more recent movers into the asset class, currently have
average allocations of less than 1%, while many institutional investors
outside the United States are below their larger target infrastructure
oThe increase in supply of mature, "institutional-quality" core
infrastructure assets is likely to lag the increase in demand, suggesting
a near-term increase in the value of assets, compressing discount rates
and future rates of return.
"We believe we are rapidly approaching a tipping point where institutional
investors who are searching for income, frustrated by lackluster economic
growth and dissatisfied with the volatility of public equity markets, will
turn to infrastructure in larger numbers and with greater allocations," said
Weisdorf. "This move could result in discount rate compression, pushing asset
values steadily higher. We expect this to happen over the next two to three
years, to the benefit of incumbent infrastructure investors."
To read more about J.P. Morgan's view on this investment opportunity, please
About J.P. Morgan Asset Management
J.P. Morgan Asset Management, with assets under supervision of approximately
$1.9 trillion and assets under management of $1.5 trillion (as of 3/31/13), is
a global leader in investment management. J.P. Morgan Asset Management's
clients include institutions, retail investors and high-net worth individuals
in every major market throughout the world. J.P. Morgan Asset Management
offers global investment management in equities, fixed income, real estate,
hedge funds, private equity and liquidity. JPMorgan Chase & Co. (NYSE: JPM),
the parent company of J.P. Morgan Asset Management, is a leading global asset
management firm with assets of approximately $2.1 trillion and operations in
more than 60 countries. Information about JPMorgan Chase & Co. is available
J.P. Morgan Asset Management is the marketing name for the asset management
businesses of JPMorgan Chase & Co. Those businesses include, but are not
limited to, J.P. Morgan Investment Management Inc., Security Capital Research
& Management Incorporated, Junius Real Estate Partners and J.P. Morgan
Alternative Asset Management, Inc.
SOURCE J.P. Morgan Asset Management
Contact: Kristen Chambers, 212-622-4111, firstname.lastname@example.org
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