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Jan Mende in Pensions and Investments: Infrastructure

Callan’s Jan Mende recently appeared in the Pensions and Investments roundtable feature, “What Does the Future Hold for Infrastructure Investing?” The article covers a wide-ranging set of topics of interest to infrastructure investors—one of Jan’s Q&As is below, click through to read the full article.

Estimated reading time: 1 min, 9 sec

P&I: Let’s start with a quick overview of infrastructure investing. Where do we stand today in the institutional marketplace and where are we headed?

Jan Mende: Allocations in the U.S. are typically in the low single digits but expected to grow toward 5%. Where we used to see assets flowing mostly to private infrastructure, funded from fixed income allocations, today we are seeing an increase in funding from other real assets and private equity allocations, flowing to public infrastructure securities as well as private funds.

The investment case for infrastructure is similar to real estate in that it’s a hard asset expected to offer both current yield as well as the potential for capital appreciation. But depending on how the investor is structuring their real-asset portfolio, they can adjust the comparative weight of those current yield and capital appreciation goals.

It’s also important to note that the return profile for infrastructure is fairly wide. You have lower returning, safer assets that may deliver more core-like returns, as well as value-added and opportunistic assets with higher return potential. There is a wide variety of options, each with a unique risk-return profile.

 

Jan Mende is a Senior Vice President in Callan’s Real Assets Consulting group. She is responsible for strategic planning, implementation, and performance oversight of plan sponsor clients’ real assets portfolios. Her role includes the evaluation of managers and their respective real estate products for plan sponsor clients. This due diligence process includes meeting and coordinating with investment managers regarding various strategies, investment processes, track records and organizational structures. Jan focuses on infrastructure, Asian real estate research, and U.S. value added strategies.