Russell Investments’ Darren Spencer argues the case for real assets

US$49 trillion in infrastructure improvements are needed by 2030, and cash-strapped governments are creating investable opportunities

Michael Ryval 9 May, 2019 | 5:00PM

Real assets, or infrastructure plays such as firms that operate toll roads and airports, account for about US$4 trillion in global publicly-listed investments. Yet as financially-challenged governments turn to external sources of capital to rebuild aging infrastructure or introduce new transportation links, that figure is expected to see a tenfold increase. Firms could spend about US$49 trillion by 2030, according to a study done by management consultants McKinsey & Co.

“We are seeing significant growth in the investable opportunity set within infrastructure, given that there is a massive need for infrastructure financing and spending around the world in order develop new infrastructure, but also importantly modernize the world’s [aging] infrastructure stock,” says Darren Spencer, San Diego-based client portfolio manager for alternative investments at Russell Investments. The firm manages the bronze-rated, Russell Investments Global Infrastructure Pool, which was launched in January 2013, and has $1.7 billion in assets.

“The projected US$49 trillion is a significant amount of money, whether it’s spent on airports or communications infrastructure such as cell towers and toll roads,” says Spencer, a native of Adelaide, Australia who has worked in the infrastructure field since graduating from Adelaide’s Flinders University with a bachelor of economics in 1994. After working for Aon Consulting in Australia and re-locating to Aon’s Chicago office in 2003, Spencer joined Russell Investments in New York in 2011. “The reality is that many governments around the world, whether they are federal, or provincial, are fiscally challenged. They simply don’t have the resources to spend on financing these investments themselves. We expect to see much more reliance on private sources of capital to help close the financing gap.”

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
NextEra Energy Inc231.95 USD0.37

About Author

Michael Ryval

Michael Ryval