Institutional Investing in Infrastructure

March 1, 2020: Vol. 13, Number 3

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From the Current Issue


Recovery, disintermediation and politics: A look back on a turbulent decade for U.K. infrastructure that saw bank lenders retreat only to re-emerge and a new broom of investors enter the market, as well as the demise of the PFI/P3 model

After an eventful and uncertain end to the decade politically, the U.K. government and the infrastructure industry will be keen to make progress in delivering the infrastructure investment the country needs for the long-term benefit of society — not just in terms of socioeconomic value but also to make the promise of net-zero carbon a reality.


Renewable energy: For renewables to boom, better storage technology must bloom

Many are envisioning a future where renewable forms of energy supplant fossils fuels and finally give the environment relief from carbon pollutants and the threat of oil and gas eventually running out. And many investors are betting billions on renewables generating lots of financial returns in addition to energy. Witness JLL’s recent declaration that it sees investment opportunities in the “surging demand” for alternative sources of energy.


Prepared and waiting: Diversification needs drive investors to private markets and real assets

According to a pair of surveys by Natixis and BDO, global investors and managers are anticipating declining market values in the near future; the only question is when a downturn might occur. In October and November 2019, Natixis surveyed 500 institutional investors globally about their expectations for investment markets — 145 corporate pension plans, 102 endowments/foundations, 103 public pension plans, 127 insurance companies and 23 sovereign wealth funds. BDO surveyed 200 fund managers at private equity and venture capital firms in the United States in October 2019.


The global listed infrastructure report: Essential news and notes

Below are recent notes, trends and key performers in global listed infrastructure. Total return performance during the past 12 months (February to February) is in parentheses. The Global Listed Infrastructure Organisation (GLIO) Index of “pure” infrastructure companies added 23 percent compared against 18.9 percent for global equities over the past 12 months. Telecom infrastructure (45 percent), water utilities (31 percent), electric utilities (31 percent) and renewables (51 percent) drove the index forward during the same period.


Infrastructure fundraising finished strong in fourth quarter 2019: Fund managers raised most capital in Q4 2019

According to IREI’s FundTracker database, infrastructure fundraising in fourth quarter 2019 far outpaced previous quarters during the year, with eight funds raising more than $41 billion. Fourth quarter 2019 fundraising far outpaced third quarter ($8.2 billion) and the mega-fund trend continued during December with Global Infrastructure Partners closing its $22 billion Global Infrastructure Partners IV fund.


The changing course of midstream energy: After years of volatility and poor performance, what can midstream energy offer investors today?

Midstream energy investments, whether public securities or private markets allocations, have long been sought after by infrastructure investors, but the sector has changed in recent years. Once a reliable go-to investment for stable cashflows and growth, the sector hit a rough patch starting in 2014, when global oil prices tanked. With balance sheet and financing challenges between 2014 and 2018 and ongoing volatility in 2019, can midstream energy again become a sweet spot for investors?

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