3 ways to invest in infrastructure

Financial journalist and commentator on 3AW and Sky Business
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Australian investors have come to understand infrastructure as a long-term investment: it is a well-established asset class in its own right now.

Large-scale infrastructure assets, that provide essential services, can act as a stable, defensive, long-term cash flow generator, offering a high level of earnings certainty, and thus a consistent yield, with low correlation to other asset classes. Infrastructure can also act as an inherent inflation hedge, which protects the long-term purchasing power of invested funds.

Many infrastructure assets either have natural monopoly characteristics, where the economies of scale make it too difficult for competitors to replicate existing infrastructure (such as in airports or transmission lines), or actual legislated monopolies through contracts/concessions (such as an exclusive right to operate a toll-road).

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