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- February 2010 Vol. 3 No. 2

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Partnerships USA: A New Model for Creating Direct Infrastructure Investment Opportunities for Public Pension Plan Investors

by Brian Chase

A growing number of institutional investors — including most notably U.S. public pension plan investors — want infrastructure assets in their portfolios. This demand appears likely to grow further. Watson Wyatt (now Towers Watson) estimated that in 2008 the top 10 managers in infrastructure alone managed $72 billion on behalf of pension funds, up from $43 billion in 2007. In January 2010, Probitas Partners estimated that nearly 100 closed-end funds were in the market for more than $110 billion in additional commitments, with the majority of such investment to be targeted on brownfield assets in developed countries. State pension systems in Alaska, California, Illinois, Maine, New Jersey, New York, North Dakota, Texas and Washington have already made infrastructure allocations, and more states are likely to follow.

At the same time, however, these institutional investors have serious concerns about the investment vehicles that are currently available to them:

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