As per a study conducted by McKinsey Global Institute, an estimated 57 trillion dollars is expected to be spent on new infrastructure projects across the globe over the next 15 years. The development of a region or nation is basically assessed by the rate of infrastructure development. So, governments, private sector, and PPPs (public-private partnerships) are taking keen initiatives in this sector. Infrastructure projects are high-cost affairs, and an enormous sum is supposed to be pumped into this sector.
Contrary to common belief, there is no shortage of capital when it comes to infrastructure development. In real, there is more than enough as governments and private investors have an increased focus on infrastructure lately. It is ideally said that – ‘not raising funds, but spending it is the biggest issue now in financing infrastructure.’
Investors’ scope
A steady rise has been witnessed over the past five years in the count of institutional investors looking forward to infrastructure opportunities. There is also an increased appetite for direct investment into infrastructure by a few partners, and more and more money is into play. Alongside this, the multilateral finance institutions are also stepping up with their efforts to game with infrastructure debt funds etc. The general sectors and individuals who have the scope to explore infrastructure challenges for money making are:
- Institutional investors
- Public treasuries
- Development banks
- Commercial banks
- Public and private corporations
- Retail investors
Raising money from infrastructure challenges
Infrastructure investors with a sophisticated understanding of the regions and projects can easily match it to their investment avenues for reaping the best benefits. Simply said, the investors need to plan and deal with each of the emerging markets individually and also have to harness excellent local knowledge to perform well on the go.
The individual investors who want to get into this sector and make use of the infrastructure opportunities must be aware of taking only calculated risks on the emerging markets and it is also vital to practice a region-wise risk assessment approach. For those who want to take a safer position, it is ideal to join hands with infrastructure investment management firms, which can offer assured and safer returns overtime. Some essentials to note while choosing such a firm are presented below.
Reputation of the firm
You should check whether the provider has a solid history of offering better returns consistently to the investors with a prudent management portfolio. Experts who have solid experience and competitive advantage in this sector can easily find out the best opportunities on behalf of you and ensure the best possible returns.
Solid sector / sub-sector experience
The company needs to be ultra focused on the infrastructure sectors and sub-sectors, in which the experts handling your investment management should have solid experience.
When it comes to general infrastructure funds, the major sectors covered include:
- Transportation
- Energy and renewable energy
- Utilities
- Power
- Telecommunication
- Pipelines
- Toll roads
- Rolling stock
- Sea ports
- Airports etc.
The hands-on experience of the fund management experts will help ensure better performance in managing your portfolios by analysing the assets, proper structuring, and working out the transactions too when needed.