Infrastructure Fund

An infrastructure fund is a financial investor who makes investments in infrastructure facilities .

Investment objects

Infrastructure funds can invest in both economic and social infrastructure projects. The economic infrastructure includes supply and disposal projects (e.g. power plants, electricity or gas networks, energy storage, disposal systems), telecommunications (e.g. networks, transmission masts, satellites) and transport facilities (e.g. airports and seaports, tunnels) , Rail networks, (toll) roads). The social infrastructure includes public buildings, e.g. B. Administration buildings, hospitals, sports and educational institutions.

If the infrastructure fund invests in a new project, i.e. the construction of a non-existing facility, it is referred to as greenfield investments . The takeover (e.g. as part of a privatization ), upgrading or renovation of an existing facility, on the other hand, is a brownfield investment . It is often by public-private partnerships ( public-private partnerships ). At the same time, infrastructure funds often participate in joint ventures with commercial operators.

As a rule, the infrastructure projects are largely financed through loans (in the form of project finance ). Infrastructure funds provide the remaining equity share . So-called loan funds , on the other hand, invest in infrastructure loans (the fund acquires loans from banks or is directly involved in lending).

interest

Infrastructure funds promise their investors a stable, long-term income stream (consisting of regular dividend payments) that is based on the income of the projects involved; Depending on the investment project, the stability of the income often results from the fact that it is a (local) monopoly or services subsidized by the public sector. In this respect, investing in infrastructure projects is different from investing in private equity ; the latter are more medium-term, are considered riskier and usually aim for higher returns without guaranteeing dividend income; the return results from the capital gain on the investment at the end of the investment period.

Structure and investors

Infrastructure funds are usually organized as closed funds and have a fund manager who usually participates in the success of the fund (carried interest ). A major initiator of such funds is the Australian Macquarie Bank .

The majority of the investors are institutional investors , but there are also funds that are aimed at private investors. In addition, larger financial investors also participate directly in large infrastructure objects, in particular insurance companies (e.g. Allianz or MEAG ), pension funds or state funds .