‘Complete change’ in infra investing

A panel at Infrastructure Investor 2011 Americas expounded on the evolution of infrastructure from its contractor industry origins, to the first infrastructure funds from Macquarie, to the current appetite for direct pension investment and long-dated funds.

Ask Conor Kelly about infrastructure as an asset class, and, to hear him tell it, there has been a “complete change”.

Kelly would know. He was at the forefront of early private sector initiatives in Japan, Korea, Portugal, Norway, Estonia and Ireland, working for French bank Depfa until 2008, when he joined Canada’s Scotia Capital.

Now, heading his own Dublin-based consultancy – Rubicon Investment Advisors – Kelly, a panellist on one of the sessions of the Infrastructure Investor 2011 Americas conference in New York, recalled his long experience with infrastructure investing.

“It started with the contractor industry, and then there was an evolution of the infrastructure fund, with Macquarie Group,” he explained to the audience. The pension fund space is now making direct investments, Kelly added.  The dynamic between the industrial space and finance has also changed, he remarked. And now? “The need for capital is enormous,” he said.

Panel moderator Mark Weisdorf was fast to pick up on what Kelly noted about direct investment.

“A fund has a 10-year lifespan,” said Weisdorf, who is head of the infrastructure investment programme for JP Morgan Asset Management, as well as a 30-year investment management veteran. And a decade might not be long term, for some.

“In Australia or Canada, they want a 30-year-long investment,” Weisdorf pointed out. “They do not want to go through having to replace a fund”.

As the panel articulated and demonstrated, infrastructure is constantly evolving.