BLOOMBERG.COM
An abundance of global savings. Trillions of dollars of negative-yielding bonds. And a bevy of institutional investors hungry for positive, long-dated yields to match their liabilities. Conditions are ripe for an avalanche of private-sector capital to flow into unlisted infrastructure, turning an industry facing an estimated $49 trillion shortfall into an asset class which, its sponsors say, offers strong cash flows, uncorrelated returns and positive real yields. 58 percent of active investors surveyed in the second quarter of the year by data provider Preqin will invest more than $100 million in unlisted funds over the next 12 months compared to 42 percent who said that in the corresponding period last year, underscoring the increasing allure of alternative assets amid ultra-low yields from more conventional capital-market instruments. But don't believe the hype: unlisted infrastructure investments fail to deliver bang for the buck — and the asset class remains handicapped by a dearth of investor-friendly investment vehicles. That's the conclusion of a research report from Deutsche Bank AG this week, which makes for grim reading for governments around the world.
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An abundance of global savings. Trillions of dollars of negative-yielding bonds. And a bevy of institutional investors hungry for positive, long-dated yields to match their liabilities. Conditions are ripe for an avalanche of private-sector capital to flow into unlisted infrastructure, turning an industry facing an estimated $49 trillion shortfall into an asset class which, its sponsors say, offers strong cash flows, uncorrelated returns and positive real yields. 58 percent of active investors surveyed in the second quarter of the year by data provider Preqin will invest more than $100 million in unlisted funds over the next 12 months compared to 42 percent who said that in the corresponding period last year, underscoring the increasing allure of alternative assets amid ultra-low yields from more conventional capital-market instruments. But don't believe the hype: unlisted infrastructure investments fail to deliver bang for the buck — and the asset class remains handicapped by a dearth of investor-friendly investment vehicles. That's the conclusion of a research report from Deutsche Bank AG this week, which makes for grim reading for governments around the world.
Read more>