The private sector has become increasingly active in infrastructure investment due, in part, to budget constraints limiting the traditional governmental source of capital. Some of the largest institutional investors in the United States have recently announced that they will increase their allocation to infrastructure investments.
“Infrastructure” includes an array of typically long-lived assets such as roads, bridges, utilities, energy facilities (such as natural gas and liquids transportation), airports, seaports, rail systems and water facilities (such as distribution and treatment facilities), as well as a range of community projects such as schools and hospitals. Infrastructure investments can offer long-term, risk-adjusted returns that are uncorrelated to other asset classes, making them attractive diversifiers in the portfolios of institutional investors. This article describes a variety of structures for infrastructure investment, and h