Private Equity Strategies: Infrastructure and Real Assets

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PRIVATE EQUITY STRATEGIES INFRASTRUCTURE AND
REAL ASSETS
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Private equity has increasingly become popular
and includes a variety of investment options that
are not just limited to buying and selling of the
companies. Two important areas within this are
infrastructure and real assets, which attract
investors who are looking for multiple
opportunities, good returns, and protection
against inflation. This ppt will look at the
private equity strategies used for investing in
infrastructure and real assets.
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What do you mean by Real Assets and
Infrastructure?
Infrastructure can be defined as a basic system
that helps in supporting a countrys economy and
quality of life. Examples of infrastructure can
be roads, bridges, and utilities like electricity
and water supply. If you think of investing in
infrastructure private equity funds, then it is
characterized by long-term contracts or regulated
cash flows, providing a predictable source of
income over time.
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List the Private Equity Strategies
Core investments
Core investments are low-risk investments that
are formed on income-generating assets. If we
talk about infrastructure, this might involve
investing in assets with stable cash flows. For
real assets, purchasing fully rented agricultural
land or real estate properties can be the main
strategy.
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Value added investments
Value-added strategies are those that pay
attention to buying assets that need improvements
to increase their value. This could mean
restoring properties that are not performing well
or upgrading infrastructure to make it more
efficient. If the assets function well, then the
investors will earn a good amount of interest
compared to the core investment. This strategy
increases the overall value of the assets giving
them a higher rank in the market.
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Opportunistic investments
These strategies have high risk and mainly focus
on the assets that are undervalued. Since they
are riskier, if you manage well, you can get good
amount of returns. This could mean capitalizing
on changes in the market, new regulations, or
other events that present investment
opportunities. In the case of infrastructure, it
might involve buying assets that need major
repairs or those that are functioning in
difficult situations.
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Sector-specific focus
Another strategy is to focus on specific areas
within infrastructure and real assets that can
grow or see an increased demand. For example,
renewable energy projects like solar and wind are
becoming more popular as the world is moving
towards sustainability. Similarly, the demand for
logistics and warehouse space has increased with
the growth of online shopping. If investors
concentrate on these growing sectors, they can
take advantage of long-term trends and changes in
demographics.
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Conclusion
Private equity strategies that focus on private
equity infrastructure and real assets offer a
great chance to create long-term value. You will
succeed in these strategies once you have a deep
understanding of the market conditions, risk
management, and certain regulations.
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