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What is an Infrastructure Investor?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 23 March 2018
  • Copyright Protected:
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    Conjecture Corporation
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An infrastructure investor is an institution involved in infrastructure investments. Typically the provenance of the government, infrastructure has increasingly utilized the resources of the private sector. Financial institutions, developers, agencies, and other institutions can all be involved in this type of investment, and individual investors may have access to investments through pooled assets and derivative products based on infrastructure investments.

Infrastructure includes a wide variety of activities from building roads to upgrading telecommunications equipment. This requires substantial funding. Historically, governments funded infrastructure development from their own coffers and through the development of public debt offerings, like government bonds. Both of these continue to be used as tools for financing infrastructure, but infrastructure investors are also involved in the financing process.

Governments may obtain loans and other forms of financing from the private sector, use the private sector to handle administration of public debt, and involve themselves in partnerships on infrastructure projects with the goal of funding those projects with money available in the private sector. An infrastructure investor is an institution involved in some way with such projects, whether it specializes in infrastructure investments or undertakes them as part of a larger investment portfolio.

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Investing in infrastructure carries a number of advantages. Such investments tend to be stable opportunities, as governments are always upgrading, and they are also deemed reliable. Governments rarely default on debt, and this can make an infrastructure investor's financial position more secure. Working with the government can also provide access to benefits like favorable agreements for financial activities.

Individual investors usually do not have enough available capital to interest the government, as it does business in very high denominations. A person interested in becoming an infrastructure investor could work on assembling a portfolio of infrastructure-related investments. This can include stocks and bonds issued by companies involved in building public works projects, along with shares in mutual investments developed for infrastructure investors, or derivative products based on infrastructure investments.

A number of publications for infrastructure investor education are available. These publications discuss trends, emerging issues, and other topics of interest. People can also attend conferences and other events in order to exchange information and ideas with other investors and brokers. Following the movements of an institutional investor or group of investors can provide interesting information about where investment professionals think the market is going and how they are choosing to apply their capital and expertise.

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