The Future of Infrastructure Investing

Stefano Gatti and Carlo Chiarella ()
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Stefano Gatti: Bocconi University, Department of Finance
Carlo Chiarella: Colegio Universitario de Estudios Financieros

Chapter 6 in Disruption in the Infrastructure Sector, 2020, pp 169-207 from Springer

Abstract: Abstract The chapter looks at the disruptive trends reshaping the infrastructure ecosystem with the aim of drawing general implications for investors and asset managers. It starts with an overview of the current state of infrastructure investing and provides a thorough discussion of the technological and socio-cultural trends with the strongest potential impact on infrastructure investment, trends which are shown to affect multiple infrastructure sectors at the same time. This last crucial observation prompts to question the traditional business model of infrastructure asset managers based on sectorial specialization, which may therefore become inefficient and prove unable to capture those transformative trends that would guarantee investors long-term sustainable returns. This leads to the proposal of a new approach to infrastructure investing by which the traditional silos strategy, based on sectorial/industry specialization, is replaced by eligibility criteria, where infrastructure is no longer defined based on industries but on features/characteristics of the needs served by that same infrastructure. By doing so, the chapter suggests that asset managers adopt a less dogmatic view of infrastructure, stretching the very concept and embracing an investment approach closer to traditional private equity with a redefined balance between reliable income streams and capital appreciation/capital gains.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:fuobcp:978-3-030-44667-3_6

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DOI: 10.1007/978-3-030-44667-3_6

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