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We are pleased to announce our latest research report:

The Paradox of Infrastructure Investing: At the Crossroads

Over the last decade, the search for yield in a zero-interest rate environment and greater portfolio diversification have fuelled investor interest in private market assets, leading to global assets under management (AuM) almost trebling. Whilst the rise in popularity of private equity and private credit has been openly discussed, infrastructure has not received such wide coverage: it remains a small percentage of aggregate private capital assets but capital flows into the asset class have nevertheless been substantial, increasing more than threefold over a 10-year period, with its share of total private markets AuM growing from approximately 5% in 2008 to 9% in 2018[1].

With this increase in appetite, has come a rise in the number of infrastructure mega funds – typically, a reliable indicator that an asset class is entering the mainstream. Historically, infrastructure investment was dominated by banks, governments and those with specialist operating knowledge. This is no longer the case, as we shall see. Is that a good thing? If so, what are the strategies for success and the pitfalls to be avoided? Our report covers the following:

  • Key drivers of growth in infrastructure investment including diversification attributes and changes in regulation
  • Investing in Infrastructure including different sub-strategies and investment structures
  • Key Questions investors should be thinking about including “is infrastructure getting more expensive and riskier?” and “Is your exposure as expected?”

As investors have turned to the asset class, the role of infrastructure within institutional portfolios has come under increased scrutiny. Investing in the asset class can be profitable, but there are widely-held misconceptions that must be guarded against, highlighting the importance of sound strategic asset allocation and thorough due diligence. In our report we guide you through these and unpack the different strategies that make up today’s infrastructure market place.

You can download the report here. Please also feel free to subscribe to newsletters across MJ Hudson to be notified of our research across private markets and the funds industry.

[1] From $118.1bn in 2008 to $524.2bn in 2018 in global AUM; and its proportional representation within aggregate private capital assets increased from 5.2% to 8.7% over the same period. Source: Preqin Ltd, primary infrastructure equity and debt strategies, as of 30 September 2019. – https://outlook.gihub.org/