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.