Infrastructure As An Asset Class

Published on
November 3rd, 2020
Duration
50 minutes


Infrastructure As An Asset Class

The Interview ·
Featuring DJ Gribbin

Published on: November 3rd, 2020 • Duration: 50 minutes

What role can U.S. infrastructure have in an investment portfolio? DJ Gribbin, founder of Madrus, an infrastructure consulting firm, and senior operating partner with Stonepeak Infrastructure Partners, a private equity firm, shares the thesis behind investing in infrastructure, specifically looking at assets with high barriers to entry, constant demand, and stability over the course of decades. He provides insight into public-private partnerships (P3s) and explains the difference between governmental infrastructure such as toll roads, water systems, and airports and non-governmental infrastructure like telecommunications, pipelines, and energy. He recently served as the first Special Assistant to the President for Infrastructure, where he led the development of the Trump Administration's $1 trillion-dollar infrastructure plan. Filmed on October 28, 2020. Key learnings: Infrastructure as a new asset class has several distinct and attractive investment characteristics. This interview highlights its potential to enhance returns and mitigate risk as part of a broader portfolio as well as provide high and stable cash flows. Infrastructure investments depend on investors' relationships with local regulators, customers, and communities.

Comments

Transcript

  • JJ
    John J.
    8 November 2020 @ 22:48
    I was very disappointed in this presentation. I had high expectations of not only learning something about the national infrastructure challenge. However, without any actionable ideas of how to take advantage of this problem leaves me with the impression that it was just a high level discussion. It could have been so much more.
  • YB
    Yuriy B.
    4 November 2020 @ 13:55
    Maybe I missed this, but does he mention any publicly-traded equities in this space?
  • LH
    Lik H.
    4 November 2020 @ 01:34
    I'm Singapore-based and my comments below are from an investment angle - a. There are a couple of infra-specific investment trust listed in Singapore (i.e. Port, Power Line System etc.). Thus far, the yields are stable (but dipped slightly in the past couple of years) - but the top line price is bad. b. Singapore Gov is a big borrowers in issuing out bonds to fund its infra development - As usual, when you've a government with AAA rating, the yield is low, but good for the insurance players as mentioned who wants stable yields with long term stability. c. These are the few infra sector that have high price gain in a 2-3 year time frame, where gains are in capital gains while yields are probably in the 3-4% range. Datacenter, Hospital, Nursing Home - These assets are listed in a REIT model with quarterly dividend pay-out. Thus far, Datacenter is the hottest space and globally we've Equinix or Digital Reality Trust. d. I'm looking at the infrastructure trust by Brookfield with potential upside if the ESG angle kicks in. Nonetheless - Infrastructure is a good space to look at esp. for investors who have a longer term timeline in mind.
  • GF
    Gordon F.
    3 November 2020 @ 20:43
    As a retired civil engineer who has worked on a variety of public works projects - water lines, sewer lines, street and sidewalk renovations, etc. - the advice to seek out good people with a track record of experience is vital. Good people because there is a lot of opportunity for corruption, kickbacks, nepotism, etc., and experience because there are so many potential pitfalls, holdups, etc., that anyone who doesn't have at least a decade of experience dealing with these issues will overlook some critical point that will cause the project to be delayed, or even shut down. The devil really is in the details on these projects. With regard to the 53,000 water systems, or whatever the number was, the reason for the separate small water systems is nearly always due to local politics. Consolidating them is often simple technically, but next to impossible politically.