Investment Overview
Infrastructure is a vital driver of economic growth in both developed and emerging markets. According to the Global Infrastructure Outlook of the G20, the world needs around US$94 trillion in infrastructure investment between 2016 and 2040 to close the global infrastructure gap. Even with current investment projections, there will be a shortfall of $15 trillion. Therefore, private investment is an attractive option. However, finding an effective and diversified means to invest in private infrastructure projects is challenging for most individual investors.
Challenges
Investing in “one-off” projects is nearly impossible for individual investors. As well, access to diverse private infrastructure funds (funds that have global as well as project type diversification) can be challenging as investment minimums can be $1M plus per fund.
Approach and Results
Northfront partnered with a Toronto-based investment fund manager, who has investors as diverse as the Canadian Pension Plan (CPP) and Ontario Teachers’ Pension Plan, as a means to access private infrastructure investments. The fund manager has an established infrastructure program that has provided investors with strong, stable results through a diversified portfolio of mid-market infrastructure investments globally. As of 2021, they hold 41 assets/projects within the fund, with a net return target of 10%+, and a cash yield of 5-7%. Northfront clients access this investment alongside other alternative assets through the Northfront Alternative Asset Fund.
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