About Infrastructure
We define infrastructure as long-life, physical assets that are the backbone for the provision of essential products or services for the global economy. Due to their nature, infrastructure assets are critical to support sustainable economic development.
Infrastructure assets are typically characterized by some or all of the following attributes:
- strong competitive positions with high barriers to entry;
- high margins and stable cash flow; and,
- upside from economic growth and/or inflation.
Examples of infrastructure assets include the following:
- Energy. Energy infrastructure includes the networks that provide basic services such as gas and electricity.
- Transportation. Transportation infrastructure supports the transport of passengers or cargo via air, land or sea and includes infrastructure such as toll roads, bridges, tunnels, airports, ports, railway lines, urban rail, ferries and other transport-related facilities.
- Timber. Timber is a vital component of the global economy, and is used to produce lumber, paper and other wood products.
- Other. Other infrastructure includes social infrastructure (such as health, justice, and education), industrial infrastructure, desalination plants.
Our portfolio of infrastructure assets are primarily in the energy, transportation and timber sectors, located in North and South America, Europe, Australasia and China.
Evolving As An Asset Class
Historically, infrastructure has been developed, owned and operated by governments and municipalities and to a lesser degree by industrial owners as part of their broader operations. However, due to a combination of supply and demand factors, these assets are increasingly being transferred to private sector owners.
On the supply side, there has been substantial under-investment in infrastructure in developed countries over past decades. Substantial upgrades and expansions of infrastructure will be required to make up the shortfall and support projected economic growth.
Infrastructure is evolving as an institutional asset class because of its relatively low volatility and solid returns. By investing in infrastructure, investors can benefit from the royalty income streams on essential assets, which rely on economic growth.