Institutional Investing in Infrastructure

September 1, 2020: Vol. 13, Number 8

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From the Current Issue


At the crossroads of infrastructure and technology: Disruption and opportunity

As we look to the future, new technological advancements, from green energy to driverless vehicles, promise to impact and benefit our lives. In the world of infrastructure, we have already seen how innovations such as 3D modeling and drone imagery are helping to design and maintain assets, but with technology developing at an ever-increasing rate, could this actually pose an issue for investors?


The COVID-19 effect: The pandemic and global infrastructure

Merriam-Webster’s dictionary defines pandemic as “an outbreak of a disease that occurs over a wide geographic area and affects an exceptionally high proportion of the population.” What this definition does not encompass is how a pandemic not only affects the population on a social level, but also in the world of business — i.e., the stock market, retail, small business, restaurants and infrastructure.


Infrastructure investment trusts: A defined solution to the infrastructure financing gap

The G20/OECD Report on the Collaboration with Institutional Investors and Asset Managers on Infrastructure: Investor Proposals, released in July 2020 at the G20 Finance Ministers and Central Bank Governors meeting, presents multiple proposals received from the private sector on mobilizing investment in infrastructure, including a proposal on a clearly defined financial vehicle for infrastructure — an infrastructure investment trust (IIT) — for which the Global Listed Infrastructure Organization (GLIO) provided comments and feedback. The report notes: “A purpose-built Infrastructure Investment Trust (IIT) structure could act as a liquid investment vehicle for essential infrastructure, particularly in emerging markets where foreign investment in listed equity is now common amongst many investors.”


The global listed infrastructure report: Essential news and notes

The GLIO Index climbed 4.2 percent in July, with renewables, electric and water utilities plus railroads advancing strongly. Japanese passenger rail and airports declined. Global equities added 4.8 percent in July. Once we overcome the worst of COVID-19 and lockdowns continue to ease in most countries, infrastructure in its many forms will be critical to the recovery.


Why renewable energy is fueling investor interest

The climate emergency has brought the renewable energy sector to the fore as part of the solution for a low carbon future. It’s underpinned by a growing array of sustainable infrastructure, stretching from offshore wind turbines to large-scale solar parks. And while Covid-19 lockdowns have further raised public awareness of climate change, the need for greater investment in renewable energy infrastructure is becoming more pressing as governments aim for ambitious net-zero goals.


ESG and unlisted infrastructure investing: Insights from the Long-Term Infrastructure Investment Association’s ESG Handbook

In just a few years, ESG, also known as sustainable or responsible investing, has moved from a slightly idealistic niche to front-page, a mainstream dimension for investors, one that strongly influences the performance and resilience of their investments over time. This is particularly the case in infrastructure, in view of its wide reaching and long-term consequences for the community. Indeed, in many cases private investors have been not just accompanying the trend but pioneering evolutions, complementing, or preceding regulatory requirements. A lot of corporates, investors and operators have embarked on communicating their values and sharing their approaches to the subject.


Infrastructure fundraising cools off: After raising close to $40 billion in consecutive quarters, second quarter fundraising falls to $13 billion

According to preliminary data from IREI’s FundTracker database, infrastructure fundraising in second quarter 2020 fell considerably compared to first quarter, with eight funds raising more than $13 billion in the second quarter. In first quarter, 14 funds raised more than $39 billion, and in fourth quarter 2019 eight funds closed on more than $41 billion.


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

The world is changing and so should our investment portfolios. Portfolio resilience has to go beyond government bonds and consider alternative return sources that can provide income and diversification. As the largest opportunity in private infrastructure, renewables is increasingly being asked to play that role in traditional portfolios. At the same time, rising investor allocations, increasing market participants and declining subsidies are changing the investment landscape.

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