Knowledge is power

October 13, 2014 admin

Being the editor of IREI’s Institutional Investing in Infrastructure publication affords a 30,000-foot view of the infrastructure investment world. Institutional infrastructure investing is, of course, a global endeavor — participants invest in toll roads in Australia, water projects in California, hospitals in Canada, airports in the United Kingdom, solar farms in Spain, natural gas pipelines in Norway and more. And in each of these markets are overlays of politics and public policy, regulatory decision making, and a host of other considerations unique to each market and each investment.

Another luxury of editing I3 is the perspective I get. I speak with, read from and listen to a lot of people from all sides of the market — a 360 degree view of the market.

Since IREI launched the I3 conference in 2006 and the I3 publication in 2008, it has been a crash course in global infrastructure investing, and it has been like drinking water from a fire hose. So when I was recently asked to give a 30- to 45-minute “Infrastructure 101” presentation to some of my colleagues at IREI headquarters in San Ramon, Calif., I thought: “piece of cake.”

However, I soon realized that a lot of what I now instinctively know about infrastructure investing is not at all easy to communicate. I wanted to fast-forward past the basics — the sectors, the countries, the investment products — and get into the here and now of what is going on in the market today and the trends that are driving it.

That would be impossible. Having typically been on the receiving end of such a presentation, thinking of how to explain what infrastructure investing is to colleagues, most of whom do not follow the goings-on of infrastructure on a daily basis, is a test and a chance for even greater understanding of the asset class.

I soon found myself remembering all those clichés I kept hearing again and again at our conferences from panelists over the years, “You have to crawl before you walk, and walk before you run.” Or, “we are in the first inning of a nine-inning game.”

Clichés are clichés for a reason — they can be pretty accurate, and now that I was on the other side of the panel, they made much more sense.

Not unlike many things, with infrastructure investing, you do have to know the basics before you can get a better understanding of the more complicated and nuanced aspects of the market.

Deciding what was relevant information and how to present it, while also trying to lessen the overwhelmed feeling I myself experienced when I was first learning about infrastructure investing, was an interesting and worthwhile exercise. In fact, I would suggest institutional investors assign this task to their staffs — have the infrastructure staff explain what infrastructure is to members of their investment committees or boards of trustees, or the staffs of other asset class teams related to infrastructure — real assets, commodities and private equity, for example.

And that is where I think many investors who started six to eight years ago have moved on to — they have a solid fundamental understanding of what infrastructure is and what it can do for their portfolios. They also have the confidence to forge ahead with investor clubs and consortiums that are driven by their interests.

The market has moved on to a new level — the investors who began infrastructure programs have progressed passed Infrastructure 101, and they are now taking the lead and creating a vision of the future infrastructure investing.

DrewWebsiteDrew Campbell is senior editor of Institutional Investing in Infrastructure.

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