Infrastructure has the potential to provide inflation protection, income and resilience in uncertain times.

Infrastructure such as utilities, telecom systems and other essentials of modern society is poised at the edge of transformational change, and you can be a part of it. 

Emerging economies need a range of basic services, especially in fast-growing cities. Developed economies’ aging essential infrastructure, such as bridges and water utilities, need upgrades. The move toward a greener global energy future, and a more advanced and digitally connected society, needs to be built.

The capital that will be needed far surpasses governments’ capacities. Experts predict that by 2050, cities will add, on average, more than 2 million miles of power lines and lay more than 4 million miles of water and sewage pipes. This is just one example of why we see the record pace of growth in the private infrastructure market accelerating further.

Infrastructure has the potential to deliver strong investment returns because it isn’t optional, it’s essential. We all need it all the time – when the economy is thriving and when it’s not. Moreover, returns generally don’t move the same way as stock or bond returns do. So, like other real assets, infrastructure is an uncorrelated diversifier. And since regulators peg utility rates to cost-of-living increases, there’s an embedded inflation hedge.

Meaningful inflation protection, portfolio diversification, the potential for consistent cash flow, and historical outperformance in volatile times are opportunities not easily found elsewhere.

Rick Barragan is the Managing Director, Los Angeles Market Manager, for J.P. Morgan Private Bank.

[email protected] | (310) 860-3658

Source: J.P. Morgan Private Bank Insights, April 21, 2023. “Invest in global infrastructure to hedge and help build a greener future” By Tiffany J. Lewis, Head of Infrastructure Investments and Diverse Manager Strategies, and Sergio Pawlak, Head of Alternative Investments, Latin America, J.P. Morgan Private Bank