How can real assets help income-seeking institutional investors?

28/04/2017

Institutional investors, particularly pension funds, are interested in alternative approaches to generating the income necessary to meet their long-term liabilities. Investments in real assets, such as infrastructure and real estate, can capture a number of attractive features.

  • Delivering inflation-linked income over the long term
  • Providing secure and reliable cashflows
  • Adding diversification from a broader opportunity set

Investing in real assets in a variety of ways can help achieve an attractive income for the long term. Rental, or lease, income from real estate can be gained from a number of different approaches. Infrastructure debt assets, public or private, can offer reliable cashflows that are usually well protected by strong covenants. Infrastructure equity, meanwhile, can provide long-term cashflows that are usually insulated from inflation and the economic cycle. This paper looks at the features and attractions of the main real asset investment opportunities of interest to pension funds and other long-term investors.

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