Institutional Investing in Infrastructure

March 1, 2016: Vol. 9, Number 3

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From the Current Issue


Think globally, act locally: Governments at all levels are working in tandem with private investors to address ailing infrastructure

North America, and the world, is facing a significant infrastructure problem affecting essential services now, the impacts of which will continue well into the future. Transportation systems, energy grids, water systems and more, that were conceived and built half a century or more ago, are crumbling and endangering the public.

One need not look further than the recent water crisis in Flint, Mich., to see the dire situation that public infrastructure is facing, with the added problem of a lack of resources to properly fix or rebuild failing infrastructure. 


What is on tap: The i3 conference agenda takes shape

Institutional Real Estate, Inc. will host its 11th annual infrastructure conference in June — IREI: Infrastructure Strategies 2016 — and with the event on the horizon we recently held an initial conference call with our conference advisory board to learn what issues and topics are at the tops of their minds in 2016. These discussions provide insight into what is important to institutional investors such as public pension plans, insurance companies and sovereign wealth funds who attend Infrastructure Strategies and what issues impact their portfolios and decision making — all of which helps the board shape the conference agenda. 


A global perspective on Asian infrastructure financing needs: Ambitious infrastructure plans call for creative capital solutions

Good infrastructure is key to economic growth as well as social and ecological development. Infrastructure investment requirements are huge worldwide, and particularly so in developing economies. Many countries are held back by chronic underinvestment in infrastructure and poor maintenance of existing infrastructure. However, there can also be “overinvestment” of taxpayers’ money in infrastructure. With public sector budgets often stretched, the private sector is asked to play a bigger role in the financing of infrastructure.


Infrastructure marketing timing: Infrastructure investors are taking their time before committing to funds

As the world has bounced back from the recession, most asset classes have seen their fundraising times steadily decline. Infrastructure, however, is living a different story. A graph showing the average time infrastructure funds have taken to close each year since 2012 looks something like the mouth of the bear in The Revenant. The average marketing time is up one year, down the next, up again, down again and so on. 


Infrastructure: support for renewable energy in emerging markets

Emerging Asian and Latin American markets continue to provide an attractive case for investment in infrastructure, driven by economic growth and continued high demand for private capital to fund infrastructure investment. Investable opportunities remain scarce, however, not least because of intensified currency volatility and continued uncertainty surrounding regulatory risk in many countries. 

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