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- April 1, 2016: Vol. 9 Number 4

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Regulating expectations: At what point do regulatory changes stop being an acceptable part of infrastructure assets

by John McKenna

Infrastructure needs money. Around $70 trillion, according to the OECD’s prediction of the likely amount that needs to be spent globally on infrastructure up to 2030.

Historically, the bulk of spending on infrastructure has come from governments and, in the past couple of decades, bank debt.

These traditional sources of infrastructure finance will be insufficient in coming years, however, both due to the scale of the challenge and their own limitations. Public deficits, increased debt-to-GDP ratios, and increasing pressures on public pension funds have constrained government budgets in spite of record low borrowing costs. Investment banks, meanwhile, have been subject to stricter capital requirements following the Global Financial Crisis, limiting their ability to lend to major infrastructure projects.

Enter institutional investors. Funds dominated by pension and insurance companies invested a record $444 billion in 914 transactions in 2014, accord

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