Deutsche A&W - Research Report: Why Invest in Infrastructure

Conclusions
Infrastructure investment continues to gain interest among investors, given its potential to generate attractive, inflation-hedged total returns. As infrastructure financing increasingly moves towards private investment due to public sector budget as well as bank financing constraints, investment opportunities in the asset class will increase, particularly in the unlisted infrastructure and infrastructure debt markets.

In a multi-asset portfolio, unlisted infrastructure investment can offer diversification benefits with the potential to own real assets that generate high-yielding, income-oriented returns and stable, attractive, inflation-hedged total returns. Unlisted infrastructure has the potential to deliver more attractive risk-adjusted returns than listed infrastructure securities. This is mainly due to comparatively lower volatility.

Unlisted infrastructure investment can suit different risk/return profiles. Mature infrastructure has the potential to provide stable long-term returns, while growth and development infrastructure have significant capital appreciation potential. Returns for all lifecycle investments can be de-risked and/or enhanced by the specialist skills of professional infrastructure investment managers, particularly if supported by the specialist skills of asset management teams.