May 2020

In this paper, we examine the benefits of including private infrastructure investments in institutional portfolios. We briefly describe the asset class, opportunities for institutional investors, and segmentation of the market.

We focus on private markets for these assets because they offer greater portfolio diversification benefits, closer economic alignment between the manager and the investor, and higher likelihood of alpha than public market options. We use historical private market index data to examine infrastructure’s attributes and return behavior, with a comparison to other asset classes generally. Our paper addresses implementation issues associated with infrastructure allocations. We conclude that the asset class’ offerings are diverse and robust, performance has been good relative to various benchmarks, and many institutional portfolios have benefitted from including infrastructure among the asset classes.