Private infrastructure refers to investments in physical assets and facilities that provide essential services to the public, such as transportation, energy, water, and telecommunications. These investments are typically made through private infrastructure funds, which pool capital from institutional investors, high-net-worth individuals, and other accredited investors to finance and manage infrastructure projects. Private infrastructure can offer attractive returns and diversification benefits, making it an appealing option for investors seeking alternative investment opportunities.

Private infrastructure funds raise capital from investors to finance the development, operation, and maintenance of infrastructure projects. These projects can include roads, bridges, airports, power plants, water treatment facilities, and communication networks. The goal is to generate stable and predictable cash flows from the operation of these assets, which can provide attractive risk-adjusted returns for investors.

Private infrastructure investments are typically long-term in nature, with investment horizons ranging from 10 to 30 years. This long-term perspective allows investors to benefit from the steady income generated by infrastructure assets, which are often regulated and have predictable revenue streams. Additionally, private infrastructure investments can provide capital growth as the value of the underlying assets appreciates over time.

One example of a private infrastructure fund is the StepStone Private Infrastructure Fund, which invests in a diverse range of infrastructure assets, including transportation, energy, and water. Another example is the Cantor Fitzgerald Infrastructure Fund, which focuses on investments in energy, transportation, and water infrastructure projects. These funds offer investors the opportunity to participate in high-quality institutional investments and achieve diversification.

Investing in private infrastructure can offer several benefits, including stable and predictable cash flows, capital growth, diversification, and access to unique investment opportunities. Infrastructure assets typically generate steady income from user fees, tolls, or government contracts, which can provide a reliable source of returns for investors. This stability is particularly attractive in times of economic uncertainty.

In addition to stable income, private infrastructure investments can provide capital growth as the value of the underlying assets appreciates over time. This combination of income and capital growth makes private infrastructure an appealing option for investors seeking both steady returns and long-term growth.

Diversification is another key benefit of private infrastructure. By investing in infrastructure funds, investors can gain exposure to a different asset class that is not correlated with public equity and bond markets. This can help reduce overall portfolio risk and enhance returns. Additionally, private infrastructure investments can provide access to unique opportunities that may not be available through traditional investments.

While private infrastructure can offer attractive returns, it also comes with risks. One of the main risks is the potential for regulatory changes that can impact the revenue streams of infrastructure assets. Additionally, infrastructure projects can be subject to construction and operational risks, which can affect their performance.

Another risk is the lack of liquidity in private infrastructure investments. These investments are typically long-term and cannot be easily bought or sold. This can make it more difficult for investors to access their capital when needed. However, purchasing these investments via an interval fund improves the liquidity risk.