Special report: Outlook 2018

Managers look to Washington for concrete proposal on infrastructure plan

Infrastructure managers are expecting returns to fall in 2018, but that's not expected to dampen fundraising.

One issue that's top of mind for infrastructure managers is the possibility that the Trump administration could be releasing an infrastructure plan, said Julio Garcia, head of infrastructure, North America, at infrastructure manager IFM Investors, in New York.

"There's definitely interest in (private investment in infrastructure in the U.S.) because it is being talked about," Mr. Garcia said.

However, conversations among managers and investors have not turned into action because the administration has yet to release a concrete proposal and there have been "conflicting statements," he explained.

During the presidential campaign, candidate Donald Trump promised to release a plan to spend $1 trillion on infrastructure in 10 years within his first 100 days in office. Sources said that the Trump administration expects to release an infrastructure proposal in January.

In the U.S., IFM is continuing to focus on investments such as utilities and midstream energy investments that have a long history of private financing, he said.

Brent Burnett, a Portland, Ore.-based managing director, real assets, at consulting and money manager Hamilton Lane Inc., likewise said he has yet to see investors change their investments based on a possible federal infrastructure initiative.

However, the possibility of a plan announcement in 2018 is spurring conversations between general partners and limited partners, he said.

"This (infrastructure) has been on the political radar for some time and, although it's generated a certain degree of conversation, investors are not making any specific adjustments to their portfolios as a result of the loosely defined plans that have been put on the table to-date," Mr. Burnett said in an email. "We, along with most other investors, are paying attention to what is being considered, but recognize there are some real hurdles to overcome before any infrastructure plan in Washington has an impact on the bridges in Portland, for example."

There has been a lot of "watchful waiting" by industry executives and investors alike, said Alan A. Pardee, New York-based co-founder and managing partner of placement agent Mercury Capital Advisors Group LP.