Institutional Investing in Infrastructure

April 1, 2018: Vol. 11, Number 4

$195.00 Add To Cart

From the Current Issue


The rise of infrastructure debt as an investment opportunity: how the strategy can add value to investor portfolios

Before the global financial crisis (GFC), traditional banks were responsible for nearly 90 percent of infrastructure debt finance. But regulations issued in the wake of the crisis limited the ability of banks to provide these loans, notably for longer term financings. Private placements or municipal bonds also have played an important role in financing infrastructure investments in the United States, but they have focused on investment-grade assets. After the GFC, managers began offering a variety of options for investors to access both investment-grade and non-investment-grade unlisted infrastructure debt with the potential for attractive returns.


Mega-funds sweep up capital: infrastructure mega-funds account for 74 percent of capital raised since 2015

Infrastructure mega-funds — those funds raising $2 billion or more — have been responsible for most of the capital raised each year since 2012 — and this trend shows no sign of ending. In fact, it might even be accelerating. In the past three-plus years ending March 15, 2018, 88 funds closed with an aggregate total of $171.2 billion raised. Of that total, 30 mega-funds, or 34 percent of the total number of closed funds, have raised $127.1 billion, or 74 percent of the capital.


Bigger, faster, better: a more efficient permitting process can help America rebuild its infrastructure

The infrastructure plan issued by the White House launches an essential public discussion of how to rebuild America’s crumbling infrastructure in a timely fashion. Streamlining permitting is vital, and the White House rightly features it prominently in the plan. The challenge, as it relates to streamlining, is to align the permitting process with the need to modernize America’s decrepit infrastructure.


Catching the momentum: has the P3 model caught on in the United States?

President Donald Trump’s infrastructure plan could be a powerful contributor to the momentum of the P3 model and other infrastructure projects. But does it go far enough at creating a solid plan? If the proposal gains enough congressional support to be enacted, the United States could experience investment in infrastructure it hasn’t had for decades, and that would piggyback on momentum that has slowly been building in public-private partnerships.


Being direct: institutional investors are investing with internal teams that operate like investment management firms — what are the benefits and challenges?

Direct investing, long the purview of Canadian and Australian pensions and superannuation funds, has increasingly become the apple of many an investor’s eye. In theory, these investors, seeking to get out from under the fees and controls that come with making commitments to investment funds, create a fund management team of their own, internally. They hire staff and create departments that mirror those of the investment fund managers as closely as they can, and then research and make and manage investments themselves.

Forgot your username or password?