Infrastructure investments are often touted for their ability to protect against inflation, but not all assets can do this, and those that can, do so at varying degrees. With inflation rising, and in a higher range than previous decades, investors should understand how and why these differences occur in infrastructure assets and sectors, according to Patrizia’s report Inflation protection in infrastructure portfolios: Not all assets are cut from the same cloth.
For investors seeking the inflation-proofing qualities of infrastructure, a diversified portfolio of assets with direct linkages to CPI in their revenue, as well as high operating margins and operating structures not susceptible to interest rate rises, are the best bets.
The report reviews the operating cash flows of regulated infrastructure assets, toll roads, airports and public-private partnership investments to show how inflation protection can vary and why these inflation-fighting qualities ar