Corporate Insights Infrastructure:
investing for the future

Infrastructure:
investing for the future

(1st Quarter 2020)

Themes
 

Beyond bridges and tunnels

  • Core Infrastructure Assets: risk-adjusted returns have tightened
  • Core Plus: Expanding the definition of infrastructure
  • Going Global
  • Going Green

How to Take Action

  • Opportunities for Infrastructure Corporates
  • Opportunities for Non-Infrastructure Corporates

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Introduction

Infrastructure has become top of mind for public governments, private investors and corporates. Why has an issue that has historically been a government concern, almost a background issue, moved to such an important place in the minds and agendas of so many? There are two big reasons.

The first – obvious – reason is the current state of many conventional infrastructure assets. In many countries, roads, bridges, rail, power – infrastructure that was put in place decades ago – has not been funded in a way that has kept pace with usage by growing populations nor with technological advances. So these assets need significant upgrades, modernization and investment. Furthermore, digitization, urbanization and other macro changes now mean that the term infrastructure encompasses many more types of assets than we would have considered only a few decades ago... especially communication and logistics assets. Therefore, infrastructure corporates are increasingly looking for ways to modernize their asset fleets.

The second reason that infrastructure has become topical concerns conventional companies, or non-infrastructure corporates – those who have not typically played in the infrastructure sandbox. They now realize that there is a large and growing pool of private capital – coupled with teams of management experts – out there looking for infrastructure like assets to acquire and consolidate. For non-infrastructure corporates, the attraction is often their ability to hive off non-core pieces of their businesses to new owners, in order to monetize these assets at today’s higher valuations. At the same time, it is currently such a seller's market in infrastructure that non-infrastructure corporates need not necessarily give up ownership to an infrastructure investor.

In this latest edition of Credit Suisse Corporate Insights, we make the point that infrastructure today is not what it used to be. As the infrastructure asset universe is expanding, the opportunities to take action and unlock value span a wider array than ever.