'Safe' infrastructure funds ramp up fund raising

* Infrastructure funds target $100 bln of new capital

* Investors see infrastructure as "relatively safe haven"

* Funds have $65.5 billion to invest

* Road projects favoured over "green" investments

By Simon Meads and Tom Freke

LONDON, April 27 (Reuters) - Infrastructure funds are seeking more than $100 billion from investors as they try to tap clients seeking a safe haven as governments around the world look to stimulate their economies with public projects.

Data from consultancy Preqin puts capital raising in the sector at $102 billion, the most since it started collecting data in late summer 2008.

"If you have to put your money somewhere and you want to get an additional return over and above gilts, infrastructure provides that," said Jon Simpson, partner and head of global infrastructure at law firm Paul Hastings.

JP Morgan is targeting a return of 10 percent to 12 percent on its infrastructure fund focused on OECD countries, said Joe Azelby, chief executive officer of JP Morgan Asset Management's $50 billion global real assets group.

"Infrastructure is still viewed by institutional investors as more stable, or a relatively safe haven, but it all depends on your exposure to the real economy," Azelby said.

Long-term investors such as pension funds and insurance companies have taken an increasing interest in infrastructure finance in recent years, as the long timescales of the projects often match the investment horizons of the funds.

They are also attracted as most projects effectively provide a government-guaranteed return, said Simpson.

The largest infrastructure funds seeking investment include Goldman Sachs $7.5 billion second infrastructure offering. Macquarie is jointly raising a 5 billion euro European infrastructure fund and a $6 billion international fund.

INVESTOR INTEREST

Infrastructure funds are sitting on some $65.5 billion of firepower for deals, data from Preqin showed. Governments around the world are hoping to tap those funds as they seek to stimulate their recession-hit economies.

Preqin data also show 486 institutional investors invest in infrastructure, while another 86 are considering making their maiden investment. The combined total of 572 has risen steadily from 417 in November 2008.

New investors in the asset class include the Chinese National Wealth Fund and UN Joint Staff Pension Fund.

The gathering interest comes as U.S. President Barack Obama's administration has said infrastructure and green investments are a key part of the $787 billion stimulus package signed into law earlier this year.

Obama's spokesman, Robert Gibbs, said last Tuesday the U.S. government's plan "represented the single greatest infrastructure investment" since the 1950s.

While green projects, such as building up renewable energy industries, are a cornerstone of government policies, a survey from law firm Allen & Overy published on Friday found the infrastructure industry is most interested in road-building.

"Road projects have appeal because their valuations are attractive and they can involve less engineering and construction risk than other classes of infrastructure," Allen & Overy's David Horner said.

The survey of 300 infrastructure finance specialists found the United States is the country with most appeal to the industry.

"For investors, the sheer scale of opportunity in the U.S. justifies patience with some current legal uncertainties," said Horner.

Horner said private sector investment in U.S. infrastructure is most likely in cities like Chicago where the state legislature cannot interfere with project plans.

Simpson said infrastructure buyers are focused on regions where they see lower risk, favouring western Europe over eastern Europe.

"They don't view the additional risk of transacting in Eastern Europe as worth it when they can acquire Western European assets for knock-down prices," said Simpson.

Simpson said prospective buyers are looking for "cooked" deals, where they can buy into projects at or near completion and start to make immediate returns. (Additional reporting by Claire Milhench; Editing by Joel Dimmock and Andrew Macdonald)