Infrastructure investing has seen a remarkable development in the past 20 years. Low volatility and stable cash flows have made infrastructure the place to be for many investors. This raises two questions: Can infrastructure investments deliver what they promise? And as traditional infrastructure is changing fast, how can investors adapt?
The short answers are: Overall, many infrastructure investments do deliver, at least so far, but experiences can be mixed and — at times — rather volatile. Looking forward, many new opportunities are emerging, but managing infrastructure assets will become more challenging, more costly and perhaps even more political.
It is worth looking back for a moment. Since the start of the millennium, investors have had to deal with major changes: several financial crises, extreme monetary policies and the return to more aggressive geopolitics. Investors responded by beginning to adopt more alternative asset a