The trend, which has gained traction in Canada, is seeing more interest from UK and European pension funds that have the resources to locate and manage such assets.
And advisers expect the attractions of this investment style will only increase as pension and sovereign wealth funds and family offices continue to struggle to find stable long-term investment vehicles offering decent yields.
“Buying infrastructure assets directly is one of the most interesting new trends in corporate finance,” notes George Bilicic, a senior banker with Lazard. “These assets generate good risk-adjusted returns, frequently in the 10-14 per cent range. More managers will start to invest directly or if they don’t have the capability to do this strictly on their own, to co-invest.”