Privately-owned and managed infrastructure assets have weathered the coronavirus crisis and governments should harness the resources of private investors to deliver the measures needed for an economic recovery.
François Bergère, executive director at Long Term Infrastructure Investors Association, said in a keynote presentation at the first-ever virtual IPE Real Assets & Infrastructure Global Investor Conference that during the lockdown, water, energy and IT infrastructure assets ensured the continuous delivery public services, while internet traffic was up 50% early this year on 2019.
Infrastructure to a large degree has lived up to the expectations of investors and performed well relative to other asset classes.
“Of course, this does not apply to all sectors like airports, which have suffered more than others”, he said.
“This is a good reason for governments and public authorities to harness as much as possible and leverage the private sector resources to fund and deliver the economic policy measures that are needed for recovery.”
According to Bergère, governments should try to make the most of the high amount of savings accumulated by households that could now be channelled through institutional investors into the economy – and so helping to avoid the concentration of public debt financing.
Governments could also leverage private-sector expertise in selecting, building, delivering and operating and maintaining infrastructure and real assets.
”The crisis may be seen in retrospect as a historic opportunity for investors in real assets and infrastructure in particular to demonstrate the value of their contribution to further uphold their social license to operate in a world that has been upended… and is in dire need of new or better economic policy and measures to revive the economy,” he said.
“As in any crisis, there should be a silver lining, and real asset investors are well placed to make the most out of it.”