In recent years, infrastructure has become an increasingly attractive investment asset class. As governments face fiscal constraints, public-private partnerships (PPPs) allow private capital to help finance public infrastructure projects. Major institutional investors like pension funds and sovereign wealth funds are allocating more capital to infrastructure to diversify their portfolios. This article provides an overview of the top private infrastructure investment companies and their investment strategies. There are significant growth opportunities in emerging markets and developed economies for infrastructure investment. However, infrastructure investments also carry risks such as political and regulatory uncertainty that need to be managed.
Blackstone – The largest private infrastructure investor globally
Blackstone is the largest private infrastructure investor globally with over $50 billion in infrastructure assets. It has extensive expertise spanning transportation, energy, water, waste, and communications infrastructure across North America, Europe, Asia and Latin America. Blackstone utilizes a value-add strategy focused on operational improvements, capital investment, and development expertise to enhance infrastructure assets. For example, in India, Blackstone worked with the government to turnaround troubled toll roads. Its infrastructure funds target equity returns in the mid-teens with investments typically $100 million to $500 million in size.
Brookfield Asset Management – Focus on OECD countries
Brookfield Asset Management is a leading private infrastructure investor focused primarily on OECD countries. It manages over $175 billion in infrastructure assets such as toll roads, ports, pipelines, and electricity transmission networks. Brookfield’s infrastructure funds target total returns of 12-15% by acquiring high quality infrastructure assets at attractive valuations. It looks for opportunities to add value through operational improvements, capital investment, and supporting organic growth. A notable investment is a $5 billion India infrastructure fund in partnership with an Indian sovereign wealth fund to develop roads and power transmission networks.
Macquarie Infrastructure and Real Assets – Emphasis on core infrastructure
Macquarie Infrastructure and Real Assets (MIRA) manages over $160 billion in infrastructure and real estate assets globally. It focuses on core, low risk infrastructure assets that generate stable cash flows. MIRA’s infrastructure portfolio includes airport, road, port, energy, utility, and telecom assets in Europe, North America, South America and Asia Pacific. It partners with governments for greenfield PPP projects and also acquires mature infrastructure through privatizations. MIRA aims to deliver consistent returns of 8-12% for pension fund investors with a focus on downside protection and inflation hedging.
KKR Global Infrastructure – Leveraging operational expertise
KKR Global Infrastructure leverages the firm’s operational expertise to add value to infrastructure investments. With over $40 billion in infrastructure assets under management, KKR targets mid-market opportunities in OECD countries. Its strategy focuses on investments of $100 – $500 million in size. KKR has extensive experience in carve-outs and public-to-private deals. For example, it acquired a UK water utility from a European utility company and implemented operational improvements. KKR infrastructure funds aim to generate net returns of 12-15% by improving operations and capital investment.
AMP Capital Infrastructure – Focus on Australia and OECD countries
AMP Capital has over A$200 billion in assets under management and is one of the largest infrastructure investors in Australia. Its infrastructure portfolio includes stakes in airports, ports, toll-roads, energy, and water utilities in Australia, Europe, and North America. AMP Capital Infrastructure Fund III raised over A$4.5 billion in 2020, exceeding its target size. The fund will focus on core infrastructure assets with an aim to deliver cumulative returns of 8%+ over the long-term for its investors which include pension funds and sovereign wealth funds.
Infrastructure has emerged as an important asset class for institutional investors seeking diversification and stable yields. As government balance sheets remain strained, private capital has an opportunity to finance more public infrastructure projects globally through public-private partnerships. Leading private infrastructure investors like Blackstone, Brookfield, Macquarie and KKR have accumulated significant expertise in creating value from infrastructure assets across developed and emerging markets.