Our extensive manager research, scale, infrastructure, and industry experience enable Russell Investments to secure favorable capacity terms well in advance for our clients.
Infrastructure
The long-lived, semi-monopolistic position of infrastructure assets supports a steady cash flow profile and historically low volatility as compared to broad market equities.
What is infrastructure investing?
Infrastructure is the backbone of our society. It provides the essential services that we rely on every day, such as transportation, connectivity, energy, water, and sanitation. Infrastructure also plays a vital role in economic growth and development.
However, infrastructure remains underutilized as a diversifier. Traditional asset classes like equities and fixed income play crucial roles but are more susceptible to broader market volatilities and may be supplemented to meet the long-term return objectives of investors.
The global infrastructure landscape is diverse, encompassing transportation, utilities, and social infrastructure. Unlisted infrastructure within the broader infrastructure sector has a valuation surpassing $10 trillion and is expected to experience substantial growth. Key drivers include the need for enhanced energy efficiency, rising data demands, challenges in digital communications from changing work and lifestyle dynamics, and evolving demographics.
Benefits of investing in infrastructure
Diversification
As a real asset category, infrastructure offers a distinct risk, return, and diversification profile relative to other asset classes, and thus merits consideration for a discrete allocation in a diversified portfolio.
Income generation
Infrastructure investments typically feature steady cash flows derived from tangible, long-life assets with monopoly-like pricing power; many are regulated and may feature income linked directly to inflation.
Long-term return potential
Secular growth trends in renewables, digital and social. Business models that are effective at harvesting these long-term trends are difficult to access in the listed market.
Why Russell Investments for infrastructure?
For 50+ years, Russell Investments has adeptly integrated private markets into institutional portfolios. Our robust governance culture, consulting legacy, and fiduciary mindset ensure that tailored solutions align with client returns, risk preferences, and regulatory obligations
We use thorough research and expertise to build portfolios, seeking distinct sources of return, creating value, and minimizing downside risk. We collaborate with managers specializing in unique, hard-to-replicate strategies.
A CHAT WITH ZACH
Russell Investments' Chairman and CEO, Zach Buchwald, sat down with Michael Steingold, CFA, Director of Private Markets, to get his perspective on how infrastructure is evolving and whether it's an option for retail investors and large institutions.
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Chris Wright
Director, Institutional Sales
About Chris