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Spanning the Spectrum: From Greenfield to Brownfield and Everything in Between
One reason investors find it difficult to classify infrastructure is that it exhibits qualities of several asset classes. Many institutional investors view infrastructure as a subset of commercial real estate: physical, real, tangible assets generating cash flows. Others view mature infrastructure as a substitute for fixed-income bonds with an embedded inflation hedge. Still others regard infrastructure as a private equity play, with the focus on refinancing and restructuring the business to generate capital gains. In truth, infrastructure is a hybrid asset class that has a lot in common with many traditional and alternative assets.
“Infrastructure shares many common traits with a variety of assets, including real estate, fixed income and private equity,” explains Asieh Mansour, managing director and chief economist and strategist at RREEF. “Investing in a mature, government-regulated utility is analogous to a fixed-income investment with the up