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 upside of having a