Institutional investors have gone off the deep end for infrastructure investment during the past 25 years. Allocations and money have poured in steadily during that time. But it is hard to say the love has been returned in exactly the same measure by the general partner community.
It isn’t just the grumbling over the “2 and 20” fees foisted upon limited partners either. For many investors there has been a basic, persistent mismatch between the fund structures offered, the stated goals of investing in infrastructure, and the inherent nature of most of the infrastructure assets they target.
The most obvious mismatch — placing long-lived assets targeted by long-term institutional investors in relatively short-term, closed-end funds. Yes, there have always been some options for larger investors to hold assets for longer periods of time through separate accounts and direct investments, and there have certainly been a handful of open-end funds in the market from the