Infrastructure Debt – Taking on bond-like risk to boost returns
Summary
Infrastructure projects are normally leveraged with debt. By taking on the role as lender of infrastructure debt, institutional investors can open their traditional equity/bond portfolios up to additional sources of duration and risk premium. Also, there are ways to enhance returns further within infrastructure debt. This paper gives a sense of different types of infrastructure debt portfolios across the risk-return spectrum for institutional investors to consider.
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The Case for Infrastructure Debt is Stronger Than Ever
Summary
Amid persistently low-yields and under varying market conditions, a key challenge facing prudent investors is how to push for higher yields and better overall returns while improving diversification and reducing market sensitivity. The growing importance and availability of infrastructure debt as an asset class presents a compelling yield-enhancing opportunity (with lower risk than equity) for institutional investors. The paper highlights the key fundamental factors supporting the asset class.