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Anchors aweigh: Many investors are charting a course to more do-it yourself investing, but experienced infrastructure investors say be careful what you wish for
Many institutional investors have been trending toward a more direct, do-it-yourself approach to infrastructure investments for a variety of reasons — high outside management fees combined with lower than expected returns, insufficient transparency and lack of control over individual investments. It is true that direct investing can potentially help investors lower their management fees and retain more control over their investment strategy and holding periods than they would if investing in blind pools. But for those contemplating direct investments, co-investments or club investments, and for those who have already started that process: Be careful what you wish for.
“There are some significant hurdles that must be met before an investor can be successful in these more ‘hands-on’ forms of investment,” says Janet Rabovsky, senior investment consultant with Towers Watson in Toronto.