Conventional wisdom often gets it wrong — we know this — but despite that fact, institutional investors still take a certain degree of comfort in running with the herd. This is in part because if you are wrong on an investment decision, it is better to be wrong along with a number of your board than to be the only one who climbed out on a limb — then you are left to explain to your peers why you are the only one of them to have made that investment.
Much of the conventional wisdom in infrastructure investing says that investors should commit capital to fully operational “brownfield” investments whose assets have track records of performance and are producing measurable returns.
Greenfield investments — those that need to be developed and built before they can produce an income stream, return and yield to investors — are full of unforeseen risks and should be avoided, so goes the conventional wisdom.
Brownfield is the safe bet, not only because the