Water sector investors in the future are likely to be smaller funds joining forces, because traditional sources lack appetite for risk, delegates at Water UK’s Investing in Infrastructure conference heard last week.
Changes in financial regulation are making institutional investors more risk averse at the same time as there is uncertainty over how Ofwat will set prices in future.
Paul Abberley, chief executive of Aviva Investors, said he had “severe doubts” that capital markets would put forward the investment the sector needed. Investors should take “smart risks”, he added, but “that is not the way we seem to be going today. We are simply trying to get risk out of the system”.
This article first appeared in Utility Week’s print edition of 28th September 2012.
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