Infrastructure represents one of the biggest conundrums for institutional investors today. The asset class is at the centre of a well-documented rush to real assets by the world’s biggest funds.

In theory, it is a perfect fit, offering protection against public-market volatility, secure long-term income and a yield premium over traditional fixed-income markets. But it is also unwieldy, difficult to access, capital-intensive and exposed to some unique risks.

Political risk is the one that often comes to mind. Local politicians just might succeed in scuppering a $684m (€607m) toll-road project in North Carolina and should serve as a wake-up call to institutional investors. We look at what the development means for the US infrastructure market.

Giving the institutional investment community a voice in the global political arena is the primary aim of the Global Infrastructure Investor Association (GIIA), set up by a group of investors last year.

We interview its first CEO, Andy Rose. “Investors are investing long-term money, often on behalf of pension scheme members,” he says. “So it is important that the regulatory environment is stable.”

GIIA was set up by a number of the world’s largest institutional investors, many of which appear on our Top 100 list.

Another problem posed by infrastructure is its lack of performance data. This incapacity to benchmark creates real headaches for investors. We look at the latest efforts to solve this issue. MSCI continues to build its global asset index and EDHEC is close to launching its own benchmark, with both organisations taking different approaches that should complement – rather than compete with – each other.

While pension funds and other investors grapple with infrastructure, some of the biggest investment management companies are reorganising themselves for a more ‘real’ world.

IPE Real Estate has reported on a number of investment houses merging their real estate and infrastructure activities under real-asset umbrellas. But as we report in this article, these moves are part of a bigger story which is very much being written by their investor clients – the move away from static allocations to risk-factor investing.

A risk-factor approach is likely to be helpful in selecting the best investment opportunities in infrastructure. The range of assets covered by the term ‘infrastructure’ can be unhelpfully broad – in this magazine we look at airports, water and telecoms, for instance – and so concentrating on the risk profile of an individual investment might be more intuitive than fixating on its form and function in the real world.