November is always an exciting month for us, as we get to unveil our ranking of the 50 largest investors in the asset class, the Infrastructure Investor 50. You can discover who came out on top – we won’t spoil it for you here – but what we will say is that the asset class is doing better than ever.
Last year, the top 50 managers in the world raised a healthy $282 billion on a five-year rolling basis – this year, that amount has gone up 12 percent to an even more robust $316 billion. What’s more, there are new entrants from Asia – confirming the ongoing trend of capital from the continent moving into infrastructure – and the emergence of clean energy strategies as serious fundraisers. All in all, a very encouraging evolution for the asset class.
Speaking of encouraging signs, if there’s one highlight from our wide-ranging keynote interview, starting with Anton Pil, JPMorgan Asset Management’s head of alternatives, it’s his thoughts on how infrastructure could be uniquely positioned to benefit from a higher inflationary environment. That’s especially true for investors like JPMAM, which have an equity portfolio backed by contracted and/or regulated (and hence stable) cashflows.
“If we do see inflationary pressure pick up in the US, especially if it’s above expected, that could be a defining moment for infrastructure,” Pil argues.
But it’s a controversial view. That’s partly because many wonder whether inflation will really rise meaningfully and partly because the idea of infrastructure as an inflation hedge has been more popular. For example, a source told us the other day the Canadian pension funds – among the world’s most sophisticated institutional investors – have “stopped thinking of infrastructure as an inflation hedge [which was the original idea] and see it as a pure-risk premia strategy now”.
A full year after the Brexit vote, participants at our annual UK roundtable are mostly bullish about the market, despite the uncertainty about the UK’s future relationship with the EU. In addition to the opportunities in sectors such as rolling stock and renewables, they are also optimistic the market can cover any gap potentially created by a retreating European Investment Bank.
The lending panorama, across the asset class, does indeed seem robust, with private investors increasingly doing the lending. Sure, there’s some frothiness bubbling up in certain corners of the debt universe, but as you can read on our debt special, institutional lending is very much here to say.
Elsewhere, we look at Pennsylvania’s pioneering – but now delayed – bridge-bundling PPP and ask QIC to take us through their ESG plan for Port of Melbourne.