The infrastructure bill in Congress opens the door for new equity investments — what is the potential for institutional investors?
Investors are increasingly interested in infrastructure as an asset class. It can provide attractive total returns, income, diversification and inflation protection. However, investor demand growth is being constrained by supply of deals. Overall, the bill should support deal flow over the medium term. It should release new investments for investors in the form of debt and equity opportunities, as well as provide capital for some of the lower-return/higher-risk groundwork needed for greater private capital investment.
How does the bill encourage the use of public-private partnerships to invest in infrastructure projects?
Public-private partnerships (P3) are one way to access equity infrastructure. In theory, they are lower on the risk spectrum than other equity structures, but that is a general st