Economic (i.e. airports, roads, bridge, utilities, etc ) and social (healthcare, education, affordable housing) infrastructures assets have unique economic characteristics that make them attractive to individual and institutional investors which amongst others includes:

  • long-term stable  and inflation hedged returns;
  • low default rate;
  • low correlation with other asset classes such as property and listed equities;
  •  attractive risk-adjusted returns.

The Figures below shows that Infrastructure assets have a diverse risk-return spectrum which provides an opportunity for diversification and matches investors expected risk-adjusted returns as highlighted in the financial characteristics of infrastructure assets. The long-term and inflation hedge characteristics align with the Pension Fund ‘s long term liability. Investment into infrastructure assets can be tailored to meet individual investors risk appetite and return expectations.

Source: Deutsche Asset & Wealth Management, 2015