The rundown on unlisted assets
Infrastructure investments provide capital to develop or maintain assets that are essential services or facilities such as airports, toll roads, ports, telecommunications, water, sewage and power services. These assets are considered essential services in developed countries and can improve living standards and economic potential in developing countries. Infrastructure projects often rely on substantial initial investments. Infrastructure funds typically offer risk and return expectations which are higher than private credit funds but lower than private equity funds.
Property investments involve directly acquiring property assets such as residential properties, shopping centres, office buildings, industrial parks and distribution centres. Returns comprise both income generated from rental yields and capital appreciation due to demand dynamics and improvement/development of the asset. Return and risk expectations for property funds vary significantly, from core to higher-return seeking opportunistic assets, owing to the broad diversity of strategies globally.
Private equity investments provide capital for private companies that are not listed or publicly traded. The most common categories of private equity include venture capital, growth capital and leveraged buyouts. Private equity investments require specialist fund managers to identify and source investment opportunities then drive capital appreciation through governance, financial and operational management. Many global technology companies including WhatsApp, Facebook, Twitter and Snapchat were identified and invested in at the venture capital stage by funds which operate in this space.
Private debt is a general term that describes non-investment grade debt such as corporate loans, infrastructure debt and real estate debt. These funds are generally income generating in nature with the ability to meet return targets hinging on the capability of fund managers to ensure underlying borrowers repay their principal and interest as agreed.