Infrastructure investment – a welcome diversification for long-term investors?


Investors seeking security, income and longevity of cashflows, often with links to inflation, are looking at lending to infrastructure companies and projects. We explore these opportunities in this paper.

Infrastructure typically represents the critical foundations and backbone of an economy so can take a variety of forms. Obvious and visible infrastructure investments may be seen in the building of a new hospital, motorway or railway line. Other, equally important, examples may include alternative energy production, new water and gas mains or super-fast optical fibre networks. But how is all that financed and what are the opportunities? Long-term investors are increasingly interested in participating in the asset class and providing debt financing to those companies generally or to specific projects can be a good way of diversifying a broad investment programme.

The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested.

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