Our Infrastructure team invests in companies with stable underlying performance: asset-intensive businesses, providing essential services over the long term, often on a regulated basis, or with significant contracted revenues.
Infrastructure businesses generally have a strong market position, often operating within regulated markets, or with revenues underpinned by strong, long-term contracts.
They can be described as “essential”, either because they are fundamental to economic activity and economic growth, such as utilities or transport infrastructure, or because they support important social functions, such as education or healthcare facilities.
Key features include:
- Some degree of inflation linkage
- Low volatility through economic cycles
- Predictable, income-oriented returns when operational
- Potential for capital growth
- Low correlation to other asset classes
The quality and predictability of cash flows tend to result in attractive distributions to shareholders.
We subdivide the infrastructure asset class in three categories, which have different risk/return characteristics, as shown in the graphic below.
Through its four investing vehicles, 3i offers exposure to all three categories.
- 3i Infrastructure plc has exposure across the spectrum, but invests principally in core infrastructure
- BIIF LP and BEIF II LP invest principally in PPP and energy projects throughout Europe
- The 3i India Infrastructure Fund invests in hybrid infrastructure
3i’s Infrastructure investment team focuses principally on the Utilities, Transportation and Social Infrastructure sectors.