Global investors have 120 trillion USD, 85% of that in advanced economies, and started to look at energy and infrastructure as an interesting investment opportunity to deal with the challenging low interest rate environment. Power and Infrastructure assets in emerging markets can provide high risk adjusted yields, predictable and inflation linked cash-flow and on the top of that a low correlation to other assets. Meanwhile mining and O&G businesses in competitive and established locations are well positioned to benefit from the upcoming cycle of unattended demand driven by the ongoing growth and urbanization process in the growing markets of China, India, and Southeast Asia, providing potential value upsides for investors seeking higher returns.
Comprising 60% of the world’s nearly 7.5 billion people and almost 60% of global GDP, emerging markets are a fertile ground for global investors. Frontier markets are expected to grow around twice as fast as advanced economies on average up to 2050. Over the next two decades, the global middle class will expand by another 3 billion people, coming almost exclusively from the emerging world. Approximately 440 emerging-markets cities are posed to deliver close to 50% of global GDP growth. All these countries are eager to catch up with their richer peers.
Infrastructure and energy systems in these economies are already under a huge structural pressure and the trend toward urbanization will increase even more, demanding a huge amount of investment. By 2030 the emerging markets will require more than 30 trillion USD in energy and infrastructure investments just to keep pace with growth. Given current constraints on traditional sources of public financing, institutional investors are increasingly being considered as a source of funding.
Meanwhile the ongoing urbanization process in China as well as in emerging economies like India and in South East Asia will continue to support strong demand for mining commodities. The transition to a consumption based economy in China is taking shape despite associated structural challenges given that GDP growth still materially relies on significant government investment. Strategic projects like One Belt One Road, Public Private Partnerships, and Xiong’an (new development hub for the Beijing-Tianjin-Hebei economic triangle) will continue to support large demand for mining commodities.
In this environment, investors with high quality deal sourcing networks in frontier economies and proper business approaches to assess investment opportunities shall achieve higher risk adjusted returns, while companies in emerging regions with access to strategic sources of funding will have a clear competitive advantage.
The mix of global investment will increasingly shift as emerging-market economies grow and we are fully committed to promote the connection between emerging and advanced economies especially concerning funding and strategic partnerships for Energy, Infrastructure and Mining & Metals initiatives.
We strongly believe that, if properly screened, selected and assessed, emerging markets present attractive opportunities (profitable, scalable, and with capable management) for global investors within these sectors. Our focus is to connect local businesses and projects in Energy, Infrastructure and Mining & Metals with strategic buyers or financial investors worldwide advising, structuring and delivering mid-sized transactions. We serve businesses in both developed and emerging markets with in-depth and cross-border approach, supported by our globally integrated and flexible structure.