NEPC’s Matthew Ritter was quoted in a recent Pensions & Investments article to discuss the growing interest institutional investors have had in infrastructure and renewable energy over the past decade. View the article on Pensions & Investments’ site here.
Institutional investor interest in infrastructure has grown steadily in recent years, but with more opportunities in renewable energy coupled with economic incentives borne out of the Inflation Reduction Act, more institutions are steering dollars to the asset class in a trend experts and managers expect to continue.
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Infrastructure interest among institutional investors has grown steadily over the last five or 10 years, said Matthew Ritter, Boston-based partner and head of real assets investments at investment consultant NEPC LLC.
Now, more institutional investors are replacing their energy private equity exposure, or at least new commitment dollars, with private infrastructure because of the new and appealing offerings in the asset class, Mr. Ritter said.
“As the infrastructure market has continued to grow and evolve, not just in terms of the number of managers and strategies, but really the breadth of strategies out there, there have been more attractive opportunities regardless of what your objectives are,” Mr. Ritter said.
There are plenty of reasons for institutional investors to consider investing in infrastructure today, such as yields, diversification or inflation hedging, he added.
With inflation elevated, Mr. Ritter said the focus on infrastructure and real assets broadly has increased, but NEPC and its clients take a long-term investing approach, “So investors are not typically adjusting their target allocations or dramatically increasing or decreasing investment volumes based on these sort of shorter-term market trends.”
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