Financial Markets and Portfolio Management

, Volume 30, Issue 3, pp 277–297 | Cite as

The characteristics of infrastructure as an investment class

  • Wouter Thierie
  • Lieven De MoorEmail author


There is an enormous need for infrastructure investment. Although institutional savings has shown strong growth in the OECD countries since the mid-2000s, only a small proportion of institutional assets is allocated to infrastructure. Relatively little is known about the characteristics and risk–return profiles of infrastructure assets, making institutional investors reluctant to step up investing in this type of asset. There is a wide heterogeneity in risk–return characteristics across sectors, regions, and stage of development, creating an uncertainty that explains why the flow of funds from institutional investors toward infrastructure does not reach its full potential. However, infrastructure provides significant diversification benefits that justify increased investment. Moreover, the financial crisis led to a growing interest in infrastructure as a tool for portfolio diversification among various asset classes. The goal of this paper is to review the characteristics of infrastructure as an investment class. The paper will be useful for academics looking for topics of research in the field, and will be of practical use to institutional investors considering infrastructure investment opportunities.


Infrastructure Portfolio diversification Asset allocation Institutional investor Pension fund Risk return Life cycle Investment opportunity 

JEL Classification

G11 G23 G24 



We thank an anonymous referee for useful suggestions. Any remaining errors are the authors’ sole responsibility.


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© Swiss Society for Financial Market Research 2016

Authors and Affiliations

  1. 1.Faculty of Economic and Social Sciences and Solvay Business SchoolVrije Universiteit BrusselBrusselsBelgium

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