Talk of infrastructure secondaries might seem premature given the relatively short history of private infrastructure as an independent investment class. The secondaries market for traditional private equity took decades to mature, but it now functions as a working market providing liquidity to fund investors. Immature as it is, the development of a secondaries market for infrastructure is a key piece in the development of the sector and is worthy of an infrastructure investor’s attention.
Secondaries can help address several issues that face infrastructure investors — lack of liquidity, blind pool risk, the J-curve effect and the lack of diversification can all be mitigated by an investor’s ability to sell or acquire portfolio interests on the secondary market. And there is deal flow.
“We see new infrastructure secondary deals come up practically every week,” says Jay Yoder, a partner at
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