Infrastructure investing is reaching an important juncture. Institutional investors allocate more and more capital to infrastructure but find it harder and harder to deploy. At the same time, most governments seek to promote stronger private sector participation but struggle to grow the pipeline of investable infrastructure assets. There’s a clear supply-demand imbalance.

Looking first at the demand side: Unlisted/private infrastructure assets under management have grown to almost $500 billion globally (according to data by Preqin; Willis Towers Watson). Even when including other direct investments, they still constitute only about 1 percent of institutional portfolios (that amounts to over $100 trillion globally). This order of magnitude is also confirmed by OECD figures that show an average allocation of just over 1 percent for large pension funds worldwide.

Furthermore, there is an enormous dispersion: While some investors, especially in Australia and Canada, have