Global Agenda Council on Long-Term Investing 2012-2014
Many governments have started looking to institutional investors, such as pension funds and sovereign funds, to finance infrastructure. While some long-term investors have capital to invest in infrastructure (albeit not enough to meet the demand), for various structural reasons the available capital is often not invested.
“Financially oriented institutional investors – a primary focus of governments seeking capital – are constrained by their mandate to maximize risk-adjusted financial returns.”
The Council on Long-term Investing is focusing on identifying the key structural obstacles, and the methods to address and overcome as many of them as possible.
What the Council is doing about it
Currently, the Council is focusing on overcoming the infrastructure finance gap between how institutional investors typically invest, and the manner in which many governments would like this to be done. Financially oriented institutional investors – a primary focus of governments seeking capital – are constrained by their mandate to maximize risk-adjusted financial returns. Moreover, institutional investors typically invest in existing assets in developed markets. In contrast, governments most often seek capital for yet-to-be-developed infrastructure in both developed and developing markets.
To help reduce the infrastructure-financing gap, the Council is developing a blueprint for policy-makers to create a framework that attracts capital for infrastructure. This framework aims to provide policy-makers with an overview of who the long-term financial investors are, and what attracts them to certain aspects of infrastructure investments. It will also highlight key policy and regulatory elements that drive or hinder the flow of capital towards infrastructure. Starting with the assumption that capital is scarce, the blueprint should enable governmental entities seeking to attract infrastructure capital to become more competitive, with a particular focus on equity capital, while addressing debt financing as well.
The Council will also support and drive an infrastructure initiative that develops political and regulatory risk mitigation tools. This will be done in partnership with development finance institutions, for use by infrastructure investors, particularly in emerging markets. The project is currently getting under way. In the first year of this Council term, an assessment was conducted to settle on this idea and the concept note was written.
To get involved please contact
Research Analyst: Ethan Huntington, Senior Associate, Global Agenda Councils, firstname.lastname@example.org
Council Manager: Irwin Mendelssohn, Head of Institutional Investors, email@example.com
Forum Lead: Michael Drexler, Senior Director, Head of Investors Industries, firstname.lastname@example.org
Document archive for all the issues you are interested in
- The Challenges of Long-term Investing
- The Infrastructure Imperative: A Case for Development and Investment Returns
- Increasing Social Investment Returns
- Economic and Social Investment Opportunities in Colombia
- Investments in Critical Infrastructure: The Road Ahead
- Rethinking Global Financial Reforms: The European Perspective
- Redesigning Financial Regulation