The global expansion in infrastructure investment that began with the fall of the Berlin Wall in September 1989 and lasted through the late 1990s was one of the most prolific global infrastructure cycles in history. The rapid expansion of global infrastructure asset formation that dominated the 1990s boom was highly susceptible to rapid currency devaluation, high leverage, commodity price risk and broken regulatory regimes. The U.S. technology bubble burst and the terrorist attacks of Sept. 11, 2001, further weighed down the sector, resulting in a prolonged recession in global infrastructure asset formation over the current decade.
From the late 1990s through 2004, global infrastructure asset formation experienced a downturn that spawned a transformation in how investors participate in the emergence of a new infrastructure asset class. As is often the case, the experience of the last cycle became a harbinger of change that is shaping the next cycle. An important question is: