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IFM: ‘Unseen enthusiasm’ for infra in Washington

The Australia-based fund manager says bipartisan support for an infrastructure revamp could provide a historic window of opportunity for private investment in the US.

With both Democrats and Republicans pushing for investment in the nation’s roads, bridges and waterways, the climate for US infrastructure investment is as good as it has been at any time in recent memory.

That was the message IFM Investors, an Australia-based fund manager whose investors include a number of North American pension funds, sought to convey during a press luncheon last week.

“I have not seen this level of enthusiasm for taking real action on infrastructure in Washington, ever,” Tom Osborne, executive director of infrastructure at IFM, told reporters. “That you have each party putting forward $1 trillion plans is very, very significant and in our view cause for great hope and optimism.”

Julio Garcia, IFM’s North American head of infrastructure, said the US market has warmed to private investment in the sector.

“I think the opportunities are going to be more prevalent for investors than they have historically,” Garcia predicted.

Both Republicans – prodded by President Trump’s campaign promise to spend between $500 billion and $1 trillion on an infra bill – and Democrats have talked of the need for revamping US infrastructure, with Democrats calling for government spending and Republicans looking at tax credits for private investors. Garcia and Osborne acknowledged that government spending would continue to be needed but said private investment should play a larger role.

“There is a tremendous amount of capital sitting on the sidelines today who would be willing to invest in equity for public private partnerships if there was a willingness by the state and local governments to explore it,” said Osborne. “PPPs are not appropriate for all assets, but not to explore them at all would, in my view, be a mistake.”

Garcia concluded, “We hope that everything that we’re reading now in the front pages of the papers will translate into interesting investments.”