Where to Look for Infrastructure Plays

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Jan. 15 (Bloomberg) –- Capital Innovations Founder & CIO Michael Underhill and Tangent Capital Partner’s Bob Rice discuss investing in infrastructure with Deirdre Bolton on Bloomberg Television’s “Money Moves.” (Source: Bloomberg)

Asset management.

You look at the index -- we have a chart of that.

30% upside.

We have a lot of the private -- public equity markets.

We look at the private funds come you had an enormous amount of fundraising.

What we're looking at his transportation assets, communication assets, and things like water and waste deals.

How do you account for the difference between government spending and private spending?

Investment from government and investment from the private sector.

When i look at the the fiscal deficit fiscal deficit issues -- it is played out through history.

The story has played out twice before the past.

We look at privatization of infrastructure and sources of capital, private and infrastructure funds come it is a natural solution.

I have to give bob a chance to jump in because he is wild about some energy infrastructure.

It is difficult to find yield otherwise.

To distinguish between mystery -- when i look at upstream, midstream, and downstream, there is a variability of cash flow.

When you look at upstream, you look at the variability of cash flow, you're going to see higher volatility.

Upstream means what?

Exploration and production, different types of high-risk strategies in which you see an opportunity to both make a significant amount of money and lose a significant amount of money.

When you look at downstream, you look at things like transportation, logistics, things like that.

You have a higher variability of cash flow.

Midstream space has been where investors have focused because the lower volatility of cash flows, the certainty of cash flows, and the certainty of returns.

Seeing it a little more expertise to invest in upstream and downstream.

Exactly.

When you look at evaluations where they are, the index itself, it has had a great run over the last five years.

Now they say it is going to be a partnership selection process.

Upstream and downstream, you have to look at volatility and leverage as well.

One important idea for investors in this infrastructure space in the new year -- what is it?

When you look beyond transportation, shale gas.

It is nothing new in terms of her phrase, but we look at the enormous amount of infrastructure that needs to occur, you see $34 billion worth of partnership equity issuance last year.

This year, we are forecasting $40 billion.

So you're looking at shale gas pipelines and railroads.

Wonderful to see you.

Thank you for joining us.

We're going to continue our conversation with bob rice.

A quick check in the markets.

This text has been automatically generated. It may not be 100% accurate.

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