Investors rethink as infrastructure returns shrink

Asia’s infrastructure needs have long attracted interest from private equity firms but drawn-out development and construction timeframes and eroding returns have prompted some investors to look at smaller projects, particularly in energy.

Data from Dealogic shows that the number of private equity deals in the oil and gas, energy and utility sectors in Asia ex-Japan fell to 7 in 2013 from 21 in 2010.

Further illustrating the tough times, 3i Infrastructure said in May that its $1.2 billion India Infrastructure Fund will not make any new investments as it has not delivered on its expected returns, blaming a deterioration in the political, market and economic climate since...