Infrastructure managers have been wishing for public-private partnerships to catch on in the U.S. for so long that most no longer think of them as a vibrant investment opportunity.
That's why when the IRS released a regulation that made it easier for infrastructure projects to be financed with public-private partnerships, it was little noticed by the infrastructure management industry.
“We have an existing portfolio of PPP (public-private partnership) assets in our Australian fund, but we currently don't see many such opportunities with attractive risk and reward balances for our equity investments,” said Julio Garcia, the New York-based head of infrastructure, North America for infrastructure manager IFM Investors Pty. Ltd. “There are also limited numbers of PPP opportunities, they generally feature a highly leveraged capital structure, high bid costs and have long development timelines.”
Kathryn Leaf Wilmes, a San Francisco-based partner and head of the infrastructure and real assets business of alternative investment money manager Pantheon Ventures LLP called public-private partnerships “a wild card in terms of (U.S.)deal flow.”