The role of institutional investors in financing PPP infrastructure

Ashby H.B. Monk and Rajiv Sharma

Chapter 7 in Public–Private Partnerships for Infrastructure Development, 2019, pp 142-169 from Edward Elgar Publishing

Abstract: Institutional investors – pension funds, sovereign funds, endowments and family offices – control an enormous amount of investable capital. Estimates of their investment capacity range up to $100 trillion total, worldwide. Historically most of them have invested passively through funds managed by others, surrendering substantial fractions of the returns from these investments to the investment managers. Infrastructure, with its long-term, inflation-adjusted, moderate risk_return cash flows, represents an ideal kind of investment for these investors. However, infrastructure projects are all unique and involve multiple kinds of risks in each phase of their development, that require specialized skills to evaluate. A few large pensions and sovereigns have developed the internal capacity to evaluate, invest in and manage infrastructure projects, with returns offer exceeding 12 percent. The costs of developing this capacity represent a small fraction of the fees typically paid to investment managers. Other institutional investors can benefit from lessons learned by these pensions. Pension funds that are too small to justify doing this can band together and set up aligned investment managers owned by them to invest their syndicated capital.

Keywords: Economics and Finance; Politics and Public Policy Urban and Regional Studies (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/edcoll/9781788973175/9781788973175.00016.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:18544_7

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().