Raiffeisen-Infrastructure Equities

Benefit from a global mega-trend.

Infrastructure as the key to growth, competitiveness and employment Developed economies are no longer imaginable without modern, adequately developed infrastructure. Such infrastructure forms the foundation for economic development and supplying the population and companies with raw materials and information, allowing for participation in the worldwide exchange of goods and information. Consequently, investments to overhaul and build new infrastructure are an absolutely necessary and very effective method of generating sustainable economic growth and creating or preserving new jobs. In light of this, investment in infrastructure is a top priority in the developing and newly industrialising markets, as well as in most industrialised countries, even in the face of the difficult situation in public finances. Because infrastructure projects which are sensible for the whole economy function as very good economic stimulus programmes over the short term, while at the same time forming a basis for higher government revenues in the future.

Viewed from the perspective of investors and the private sector infrastructure projects are also attractive. They generally feature good, relatively easy to forecast returns and as a rule of thumb they also involve limited risks. Revenues from infrastructure projects also offer implied protection against inflation, because for public building projects there is often an ongoing adjustment of fees to account for inflation. Companies active in this field of business also profit from the long-term nature of such projects and the circumstance that economic cycles play a far less important role in this field than in other sectors of the economy. Indeed, the need to reduce public spending often opens up additional opportunities for private capital, as public and private institutions work together more closely within the framework of so-called Public-Private Partnerships.

Enormous need for investment in the industrialised countries as well
While the EM countries’ catching-up needs in the field of infrastructure are generally quite obvious, investment needs in the developed economies are often underestimated.