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Inertia Is a Powerful Force: Are Infrastructure Investors Missing a Rare Opportunity, or Simply Exercising Appropriate Caution?
Most institutional investors responsible for managing beneficiary assets are a cautious lot by their very nature. That is neither criticism nor an exercise in pop psychology, and of course this is a generalization — there are outliers with more aggressive investment mandates. The reality, however, is that many of these investors are charged with safeguarding their constituents’ retirements or sustaining the operations of a nonprofit. This responsibility tends to instill caution, as it well should.
But one might also argue that a renewed risk-averse nature has kept institutions from fully embracing another alternative investment — infrastructure assets, particularly here in the United States — and this could expose them to the risk of opportunity cost, or in other words, missing out on a good investment. Is such caution warranted as it relates to domestic infrastructure? Or is this a rare opportunity being missed to benefit from coveted and elusive