Even in these unprecedented political times, Anthony Foxx is hopeful that America’s need for infrastructure will be what brings politicians together.
Foxx, who served as US Transportation Secretary in the Obama administration, is now playing a new role in US infrastructure, in the private sector, where he’s trying to get badly needed money to the nation’s most critical assets.
Until 2017, Foxx managed a federal department with a $70 billion budget, placing $30 billion of federal grant assistance throughout the country. Now, he’s co-heading a new business venture for Related Fund Management that will invest in businesses that build and provide services for infrastructure assets.
Foxx – who was our February 2016 keynote – recently spoke to Infrastructure Investor about his new job and infrastructure in the US political climate.
Q: What do you think has changed about US infrastructure from a year ago, when President Donald Trump took office?
In terms of the actual infrastructure itself, probably not all that much. But I do think under the surface there’s a lot of capital mobilising to try to find a place to help US infrastructure move along.
Over time our country, with all of the ingenuity we have and all the important projects we have – I’m sure things will work out over the long haul.
Q: Do you expect infrastructure legislation will become a bipartisan initiative?
I have to say that even in these times, transportation tends to be fairly neutral ground for folks. That’s because the members from all over the country who go to Washington, many of them have all different types of transportation in these areas. Hopefully, transportation will continue to be one of these areas that tends to pull people together, rather than wedging them a part. That’s always been my hope for it.
Q: What do you think is the most effective way to draw in private money for infrastructure projects?
It’s challenging because, unlike a lot of systems across the world, the US isn’t a federally driven system. It’s more of a state and local system. I think some of that capital is probably being frustrated a little bit.
It’s not always the case that private dollars are going to want to flow to areas where the need is the greatest. There are, in fact, certain projects that just don’t generate revenue but are, nevertheless, critical infrastructure. We are in a time when we need to optimise our infrastructure. Businesses that can help us figure out how to get more throughput on our existing street grid by using intelligent transportation systems or can help an airport manage its ground traffic better by optimising movements of airplanes on the ground. Those are just examples of how I think we’ve got to be thinking about how to optimise what we have.
Q: Why is the investment strategy at Related Infrastructure going to focus on businesses that support infrastructure development instead of physical assets?
There are a number of opportunities today in US infrastructure to acquire or invest in services and roads platforms across regions of the country, and to build businesses that create, not only high impact for our investors, but high impact for the travelling public.
It is the fastest way for private capital and US infrastructure needs to match. A lot of the hardcore infrastructure assets require a very long lead-up time, and there still tends to be some elements of uncertainty about how those investments will play out. But in this case, we have an opportunity to make investments in businesses that already service infrastructure and grow those platforms. In other cases, we can create a strong business case for a better way to manage services and develop infrastructure.
Q: What kind of market exists for these opportunities?
Every mode of transportation has some aspect that is either serviced or managed or developed privately. I can think of ports that use third parties to manage operations. That’s an opportunity. There are opportunities to invest in providers of intelligent transportation systems. There is an opportunity to invest in companies that manage airport operations. There’s a gazillion opportunities out there, and I’m excited because it’s an opportunity to actually make the system better.
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