Institutional Investing in Infrastructure

April 1, 2020: Vol. 13, Number 4

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From the Current Issue

Infrastructure

Making sense of the market: Infrastructure investors and consultants offer perspective

As of this writing (March 16), the equity markets are suffering the worst crash since 1987, central banks are using nearly every tool at their disposal and politicians are scrambling to provide more stimulus packages. In other words, panic seems to be the underlying decision-making emotion.

Infrastructure

Political headwinds: How populist movements could affect infrastructure investing

Infrastructure investment is inherently political, and the partnership between institutional capital and national governments has always been a precarious balance. Across most advanced economies, the need for infrastructure renewal is enormous, following successive decades of underinvestment in the “big four” sectors — transportation, power, water and telecommunications. Globally, the required investment has reached $49 trillion during the coming decade, according to McKinsey & Company estimates.

Infrastructure

Affordable housing: Shortage of affordable housing in U.S. hits crisis point

Editor’s note: This article was written before the global coronavirus crisis, but once we’re past it, the underlying shortage of affordable housing, although temporarily off our radar while dealing with said crisis, is likely to persist, as is the overall trajectory of real estate values. This is the first part of a two-part series on modern modular construction providing solutions to housing shortages. The prevailing narrative would have it that, currently, the United States is enjoying a high point in the long-running, ongoing, post–Great Recession recovery. Unemployment rates have hit an almost 50-year low, and the country has successfully bounced back from the financial crisis of the early aughts. However, viewed through the lens of the United States’ prolonged housing crisis, a wholly different picture emerges. This alternate reality is one in which the security of homeownership is elusive for many, not despite the return to prosperity, but perhaps in part because of it.

Infrastructure

Infrastructure 101: A guide to white papers and reports focused on the basics of infrastructure investing

Infrastructure — No Longer a Niche Option By Callan Institute The complete report, which was published in July 2017, is available at https://www.callan.com/wp-content/uploads/2018/07/Callan-Infrastructure-Paper.pdf Excerpt: The infrastructure investment landscape has evolved significantly over the past decades. Globally, allocations to this asset class are increasing, and managers are introducing more investment vehicles and building track records. Further, benchmarks are being refined as investors develop their expectations for infrastructure and consider its performance over the past 10 years. Some investors remain on the sidelines

Infrastructure

Adapting to the realities of ESG: The investment world is playing catch-up

For decades, many in industry downplayed the affects of climate change and suggested little could or should be done to mitigate it. But the tempest is out of the teapot now, with Australia’s bushfires and the coronavirus underscoring climate’s relationship to the natural world and the social fabric it is tethered to.

Infrastructure

Under a microscope: As coronavirus cases rise, economies and property markets react

Over the years, it has been impossible to escape the growth story, draw and influence of China — for real estate investors and the global economy. Now, that growth story is being disrupted by a black swan event, which in this case is a microscopic, highly contagious novel coronavirus — officially known as Coronavirus Disease 2019 (COVID-19) — that originated in the Chinese city of Wuhan in Hubei province in December 2019. On Feb. 28, the World Health Organization increased its assessment of the risk of spread and risk of impact of COVID-19 to “very high” at the global level.

Infrastructure

Mega-trend 2040: Futurist tapped by Allianz to explore future trends, including energy

The need to make the transition from burning fossil fuels to generating energy from clean, renewable sources — such as the sun, the wind, biomass, hydro, geothermal sources — has become very urgent. Today, only 8.4 percent of the world’s electricity comes from renewable sources. However, it is forecast that by 2050, half of the world’s energy requirements will be met from renewable sources.

Infrastructure

A conversation with Michael Likosky on U.S. airport and infrastructure systems

New York state has been a leader in the United States in innovative infrastructure investment, such as P3 and design-build — what is the approach, and what are some of the highlights and impacts of these efforts? When Governor Cuomo came to office in 2011, New York state’s infrastructure was degraded. We saw the impact of chronic underinvestment on not only the broader economy, but also on much of its citizenry. For decades, New York state had been razor focused on wealth maintenance, as had much of the country, rather than on broadening opportunity. Cuomo went at this underlying illness through a vision-driven massive investment in infrastructure throughout the state, which has sustained to this day. Our vast country is made up of laboratories of innovation. New York state is the sole laboratory focused on infrastructure-driven economic growth.