High-grade credit-like qualities attract investors
Infra debt: to establish an asset class
Among institutional investors there is a significant knowledge base for investing in infrastructure equity. It generally provides investors with a reliable dividend and long-tailed assets. In terms of risk infrastructure equity enjoys almost high yield credit-like characteristics.
By contrast, the debt issued by infrastructure projects has long been the terrain of banks. Increasingly, however, institutional investors are getting involved. But the characteristics of infrastructure debt are much more akin to high grade credit. Institutional investors used to invest in infra equity are not likely to settle for the lower risk-return parameters.