What is infrastructure? It's a fairly simple question with no distinctive right or wrong answer. A text book, or in this case Investopedia, might define infrastructure as "the basic physical systems of a business or nation"—such as transportation, communication, sewage, and water and electricity networks for a start. One's definition of this asset class is often dependent on their appetite and understanding of risk. A toll bridge under a public-private partnership (PPP) with an availability-based payment structure will require a high cost of initial investment, but returns steady yield with relatively low maintenance costs and a semi-sovereign risk profile. A crematorium by contrast might be less expensive to build, but carries significant operation and maintenance costs—and although death and taxes are two of life's great certainties, natural gas prices and predictable consumers are not.
For many investing in infrastructure, low volatility and predictable cash flows are the main attraction. For those procuring infrastructure, it's about delivering an affordable public service to promote social and economic development that facilitates local prosperity.
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