Managers say it's getting harder to find attractive investments
Most fund managers (70%) will allocate increased capital to natural resources over the next year, 41% significantly so.
The unlisted natural resources industry has plenty of dry powder say analysts at Preqin but managers will need to chose carefully as 21% say that finding attractive investments in this asset class isn’t always easy.
“Although over one-fifth of fund managers find it more difficult to source attractive investment opportunities compared to 12 months ago, this proportion varies widely by strategy,” explained Patrick Adefuye, head of real assets products. “Significant proportions of managers report a decrease in the difficulty of finding attractive assets in metals & mining assets, energy assets and agriculture/farmland assets.”
In energy, 23% of fund managers report that it has become easier to source attractive investment opportunities, while 11% reported the same for agriculture/farmland assets.
Timberland is the only strategy for which a majority (58%) of fund managers find it more difficult to source attractive investment opportunities than 12 months ago.
“All in all, there may be significant scope for deal making in some of the most active natural resources sectors over the course of 2018,” said Adefuye.
