Infrastructure allocations for institutional investors typically focus on unlisted investment options, including direct investment and private funds.
Listed infrastructure, on the other hand, has traditionally been dismissed as more of an equity play - having greater volatility than private infrastructure and less control over the management of the underlying assets. It can be argued that listed infrastructure is not a pure infrastructure investment.
The status of listed infrastructure is thought by some as similar to that of REITS, alongside direct commercial real estate investment.
Here are four papers which provide a helpful introduction to the topic of investing in unlisted infrastructure:
This 12 page document from BNY Mellon examines the arguments for allocating to global listed infrastructure - an asset class that is receiving increasing attention from asset allocators.
The authors argue that the best way to manage an allocation to infrastructure is to include within it a portion of listed infrastructure investments. The opportunity set is similar, but with the additional positives of liquidity, professional management and high quality governance.
This paper from CBRE examines the arguments for incorporating a proportion to listed infrastructure alongside the larger infrastructure allocation.
Another paper exploring the case for combined listed and unlisted infrastructure investments. The authors of this paper identify the critical investment attributes sought by investors, dividing the infrastructure opportunity into four categories of industries, ranging from lower risk, ‘pure’ infrastructure industries (e.g. utilities) to high risk industries (e.g. infrastructure services).