Perspectives

Direct Investment Opportunities - Where Next?
19 March 2013
Aongus O'Gorman

Introduction

Once highly unconventional, investments in property and infrastructure are seen as the norm today, with direct allocations becoming more popular. These asset classes are favoured because of inflation hedging characteristics, but also because the shear size of the capital required means that investors can expect to generate an attractive risk adjusted return.

Funding gaps and large long term capital requirements are increasingly characteristic of a range of industries and these types of risks fit much better on long-term investor balance sheets, as opposed to the corporate balance sheets where they presently reside.

Investors have begun to explore and exploit these opportunities, though it requires strong governance, structure, and process. Many of these opportunities require specialist expertise and investors should cautiously approach direct investment opportunities. There remains a high likelihood that poorly considered, resourced, and experienced investors will fail in their endeavours.

We consider direct investing by institutional investors and the risks and opportunities this creates. Please contact us if you would like a copy of this Perspective.



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