Alternatives Unlocked: Private Infrastructure

Unlocking Infrastructure

WHAT IS PRIVATE INFRASTRUCTURE?

Infrastructure: The Building Blocks of Society

Infrastructure consists of the physical assets required for economies and societies to function, such as toll roads, bridges and railroads. Infrastructure investors provide the capital necessary to repair and build new infrastructure. 

Infrastructure Investment Characteristics

1. Essential services supported by hard assets

2. Visibility of long-term cash flows

3. Contracted, regulated assets

4. Well-established market positions

5. Potential for inflation protection and stability through economic cycles

 

 

Infrastructure Sectors

The Role of Private Infrastructure


Governments increasingly need private capital to repair and build new infrastructure.

The public funding gap
Source: G20 Global Infrastructure Outlook. As of March 2018. Note: “Infrastructure investment” is defined here as gross fixed capital formation by the public and private sectors on fixed, immovable assets that support long-term economic growth, and also includes maintenance and replacement costs. The estimate of investment need is based on an analysis of how much countries would have to spend if they wanted to match the performance of their best-performing peers by income group, controlling for economic and demographic differences and the quality of current infrastructures.
The public funding gap
Source: G20 Global Infrastructure Outlook. As of March 2018. Note: “Infrastructure investment” is defined here as gross fixed capital formation by the public and private sectors on fixed, immovable assets that support long-term economic growth, and also includes maintenance and replacement costs. The estimate of investment need is based on an analysis of how much countries would have to spend if they wanted to match the performance of their best-performing peers by income group, controlling for economic and demographic differences and the quality of current infrastructures.

 

 

$15T
Infrastructure investment gap between what the world needs and what governments can be expected to spend based on current trends between now and 2040

 

Global Private Infrastructure Demand Drivers

There are four key forces supporting the growing demand for private-sector infrastructure investment.

 
 
 

How Infrastructure Assets Generate Revenue

Cash flow from infrastructure depends on multiple factors.

 
Cash flow from infrastructure depends on multiple factors.
For illustrative purposes only.
Cash flow from infrastructure depends on multiple factors.
For illustrative purposes only.

ATTRIBUTES OF PRIVATE INFRASTRUCTURE INVESTMENTS

Private Infrastructure Investments Typically Seek to Deliver... 

 
 
 

CONSIDERATIONS FOR PRIVATE INFRASTRUCTURE INVESTING

Private Infrastructure Investing: Risk vs. Reward

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Continuing Education: Introduction to Private Infrastructure


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Explore Other Private Market Asset Classes
Dig deeper into three other private market asset classes to learn what they are, why they matter, and how they may fit within existing portfolios.
  • Private Equity
    Private equity involves investment in private companies with growth potential or private businesses that need financial restructuring with the intention of enhancing the value of the invested companies over time.
    Learn More
  • Private Real Estate
    Private real estate refers to investment in real estate properties that are privately owned and managed by individuals, partnerships, or private companies, rather than being publicly traded in the stock market.
    Learn More
  • Private Credit
    Private credit consists of investment in privately negotiated loans issued from non-bank lenders to middle market companies that are typically not publicly traded.
    Learn More