The Next Institutional Asset Class:
From Concept to Reality

Meeting the world’s growing infrastructure needs will require responsible development and significant capital. Transitioning sustainable infrastructure development into an institutional asset class can achieve this important goal.

Download      Follow Guggenheim

 

Today, vast groups of people around the world lack access to basic infrastructure.

 

844+
Million

Clean water

Source: UNICEF

2+
Billion

Basic sanitation

Source: UNICEF

1+
Billion

Reliable electricity

Source: International Energy Agency

3.8
Billion

Internet access

Source: UN

 

Developed countries have significant infrastructure needs as well.

 

$500 Billion

is needed for infrastructure in the U.S. alone over the next 10 years.

Source: Global Infrastructure Hub

 

 

About 60%

of greenhouse gases result from infrastructure development
and use.

Source: CCCEP

 

The United Nations and other world leaders agree on the benefits of improving infrastructure responsibly.

 

Better development practices

Better economic growth

Reduced climate risk

 

Globally, there’s a critical investment gap in infrastructure.

 

$4.2 Trillion

Estimated annual investment worldwide through 2040

Source: Global Infrastructure Hub

 

$782 Billion

Estimated annual
investment shortfall

Source: Global Infrastructure Hub

 

Investors are waiting in the wings.

 

$60 Trillion

in assets are in long-term funds well-suited
for infrastructure investments.

Source: World Economic Forum

53%

of 2017 U.S. shareholder proposals focused
on sustainability.

Source: World Economic Forum

 

 

 

Scott Minerd

“We’ve reached an inflection point where doing right for the world and doing well for investors is converging.”

Scott Minerd
Chairman of Investments and Global CIO, Guggenheim Investments

 

 

In the Guggenheim Sustainable Development Quotient, we outlined the four attributes investors need to see in a project.

 

Compelling rates of return

Good governance characteristics

Environmental soundness

Positive
social impact

 

Measuring sustainability within this framework is the next critical step.

 

“Going forward, investors will require consistent methodologies and standards for infrastructure investments to be included in the sustainable development asset class.”

Anne Walsh
Chief Investment Officer, Fixed Income, Guggenheim Investments

Anne Walsh

 

Guggenheim and the WWF commissioned the Stanford Global Projects Center to study the evaluation of sustainable development. There were three key findings.

 

No single
tool or metric

has emerged as a global
industry standard.

Standards
vary widely

assessing as few as 6 criteria
or as many as 60.

More data
analysis

is needed in infrastructure sustainability reporting.

 

From here, those in the infrastructure sector must work together.

 

Align
metrics

to encourage wider adoption by investors.

Reduce
cost

of applying metrics for investors and project teams.

Enable
feedback loops

to demonstrate how metrics improve outcomes.

Improve
communication

between tools to enable reporting aggregation.

 

 




This material is not intended as a recommendation or as investment advice of any kind, including in connection with rollovers, transfers, and distributions. Such material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute a solicitation of an offer to buy or sell securities. All content has been provided for informational or educational purposes only and is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation.

Subscribe to Our Perspectives
 
PRIVACY POLICY
BUSINESS CONTINUITY
LEGAL INFORMATION
Your Privacy Rights

Read a prospectus and summary prospectus (if available) carefully before investing. It contains the investment objective, risks charges, expenses and the other information, which should be considered carefully before investing. To obtain a prospectus and summary prospectus (if available) click here or call 800.820.0888.

Investing involves risk, including the possible loss of principal.

Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Guggenheim Wealth Solutions, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Partners Europe Limited, Guggenheim Partners Japan Limited, and GS GAMMA Advisors.

© Guggenheim Investments. All rights reserved.

Research our firm with FINRA Broker Check.

• Not FDIC Insured • No Bank Guarantee • May Lose Value

This website is directed to and intended for use by citizens or residents of the United States of America only. The material provided on this website is not intended as a recommendation or as investment advice of any kind, including in connection with rollovers, transfers, and distributions. Such material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute a solicitation of an offer to buy or sell securities. All content has been provided for informational or educational purposes only and is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation. Investing involves risk, including the possible loss of principal.