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Infrastructure investments

In this note we look closer at infrastructure investments. Our objective is to provide an overview of the opportunity set, key risks and return drivers.

21 November 2013

Main findings

  • The OECD defines infrastructure as the system of public works in a country, state or region, including roads, utility lines and public buildings. Infrastructure investments are direct or indirect stakes in businesses that own or operate these assets.

  • Infrastructure assets are often grouped according to physical characteristics, cash-flow properties, contractual approach, maturity of asset and stages of market development. Infrastructure as a group covers a set of heterogeneous investment opportunities.

  • Demand for capital to fund infrastructure arises from needs to renew ageing infrastructure assets in mature economies and needs to expand capacity in emerging economies. At the same time Government capability to supply the capital needed is restrained. The result has been a widespread recognition of a significant infrastructure funding gap.

  •  Investors considering investing in infrastructure assets can choose from a wide spectrum of investment vehicles. The choice of vehicle may shape the risk-return profile of the investment.

  • The performance history for infrastructure investments is limited and performance data are to a large extent private. The high degree of heterogeneity makes comparisons across projects, structures and jurisdictions challenging. Scholarly studies on infrastructure investments are few and the approaches taken to deal with the shortcomings in available datasets vary widely. It is therefore challenging to draw general and firm conclusions based on these studies.


  • Infrastructure investments can exhibit bond, real estate or equity characteristics. The risk-return profile of an infrastructure investment generally arises from the nature of the underlying asset itself, the environment in which it operates and the choice of investment vehicle. Different investors have different goals for their infrastructure investments, which leaves no “right” way to benchmark such investments.

Download the discussion note (PDF)