Infrastructure as an Asset Class

Professor William Goetzmann teaches a course about the use of alternative investments in the institutional portfolio to students in the asset management track of the MBA for Executives program. Students study portfolios in the spirit of the Yale Model and address the range of institutional issues raised by the use of illiquid, new or sophisticated investments. Professor Goetzmann also regularly invites practitioners to his class to talk to the students about their alternative investment sectors.

Most recently, Adil Rahmathulla ’04, Co-Founder and Partner at I Square Capital and ICF Advisory Board member, spoke to students about infrastructure investments. I Square Capital is an independent global infrastructure investment manager focusing on energy, utilities, telecom and transport in the Americas, Europe, and Asia. The company has aspired to be truly global in order to migrate capital for the best risk adjusted returns.

Adil referred to investing in infrastructure as a broad-based portfolio encompassing power, energy, telecom, healthcare, social infrastructure, transportation, logistics and more. It’s a fast-growing asset class which has evolved greatly over the years.

Today, investors are looking for diversification of real assets in their portfolio beyond real estate by adding in infrastructure investments.  Investors typically view infrastructure investments similar to bonds but they do want to make a slight increase in returns compared to what they would have made in bond returns.

Adil went on to discuss how his company views investing in infrastructure, their investor base and source of capital, growth markets, and infrastructure returns. He also addressed threats to infrastructure investing which include technology and low interest rates.

He closed the talk by answering several student questions inquiring further about infrastructure investments and incorporating them as alternative investments in portfolios.