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Infrastructure brings many positives to portfolios, if investors can find the right project. Andrew Holt reports.


managers together with the people running projects, and to create some template projects that can be replicated fairly easily, from say one district heating scheme to the next,” he says.


It is also a more complicated picture, presenting other chal- lenges. “For UK investors in UK projects, the challenge is often competition from overseas investors with deep pockets,” Gra- ham says. “This is great for the projects, not necessarily good for us as an investor.”


There are other issues to tackle. “An increasing challenge, as the definition of infrastructure broadens, is projects lacking scale and needing significantly more work to be investable,” he adds. For Graham, the government could improve the situation. “Maintaining a consistent policy stance and reducing the time to get projects out of the planning stage would help greatly,” he says.


The great transition Nest’s chief investment officer, Mark Fawcett, offers a different perspective on the lack of infrastructure projects narrative. “If we consider the investment required to transition the world to a low-carbon economy, then it is clear there are plenty of pro- jects coming down the track.


“Also, with government debt across the world at heightened levels due to the pandemic, we should expect private capital to be in demand for a range of infrastructure investments,” he adds. Offering another perspective, Ted Frith, chief operating officer at investor GLIL Infrastructure, points to the influence of renewa- ble energy on the issue. “It’s not that there aren’t plenty of pro- jects out there, but the increased focus on areas such as renewa- ble energy has made many a lot more competitive,” he says. “The infrastructure market has attracted a large amount of cap- ital looking to invest in these sectors, which in turn drives up the price,” Frith adds. “Investment opportunities have always relied on a range of factors lining up at the same time, but right now you need to work harder and be smarter to find the pro- jects that are appropriate, accessible and provide diversification for the fund.” But not enough private capital is flowing into such assets. In Europe, an estimated €650bn (£544bn) of additional invest- ment is needed per year by 2030 to fund the green and digital transitions, the European Economy Commissioner says. “With public funds stretched following the Covid-19 pandemic, the private sector has a vital role to play in meeting these funding requirements,” Armanini says. Pension funds are being proactive in this area, including the


December – January 2023 portfolio institutional roundtable: Infrastructure 31


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