Infrastructure Represents Opportunity

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    Investments in infrastructure represent an opportunity to kick start global growth and create a new asset class for investors in the years ahead, says a report from Citigroup Inc. Although investments in infrastructure represent a declining share of gross domestic product (GDP) spending, there’s a desperate need for new building in emerging markets and much of the existing infrastructure in developed markets is aging and needs replacement, it says. The global need for infrastructure spending will amount to US$58.6 trillion over the next 15 years which represents an immense opportunity for private sector investment. However, global equity and credit markets have been hampered from meeting this need for a variety of reasons, including the lack of bankable projects, a mismatch of risk perceptions, and an immature, fragmented, and relatively disorganized industry. To overcome these obstacles, the report calls for making infrastructure a more accessible asset class, which allows investment to take place in a liquid, transparent market.