Private equity: growing investment vehicle in infrastructure
Gauri Chicker and
Michael J. Garvin
No 207723, 50th Annual Transportation Research Forum, Portland, Oregon, March 16-18, 2009 from Transportation Research Forum
A demand for infrastructure development concurrent with federal deficits and budget shortfalls faced by the government has encouraged private participation in infrastructure projects. This has caused infrastructure funds to evolve. Infrastructure funds allow investors to gain access to the underlying characteristics of the portfolio of infrastructure assets. These funds have seen a growth in investment through unlisted and listed equity and are attracting investors because of their stable, long-term nature and relatively strong yields. Pension funds have also invested in the infrastructure sector for portfolio diversification and risk mitigation. The investors can not only reduce risk by investing in a portfolio of infrastructure entities with a negative or relatively low correlation between them, but also by investing in the equity market of other sectors. A low correlation between infrastructure and other sectors has enticed the risk-averse managers to invest in infrastructure funds. This paper discusses various cash inflow channels that support infrastructure growth and the reasons for the exponential growth in infrastructure funds. Various barriers and regulations that discourage investment in infrastructure assets are also highlighted.
Keywords: Research Methods/ Statistical Methods; Resource /Energy Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ags:ndtr09:207723
Access Statistics for this paper
More papers in 50th Annual Transportation Research Forum, Portland, Oregon, March 16-18, 2009 from Transportation Research Forum
Bibliographic data for series maintained by AgEcon Search ().