Global Projects Blog http://crgp.stanford.edu/news/ en-us Copyright 2012 Mon, 07 May 2012 13:54:55 -0800 http://www.sixapart.com/movabletype/?v=4.32-en http://blogs.law.harvard.edu/tech/rss 90% of Infrastructure Investors are Direct 90 percent of infrastructure investors make direct investments in the asset class. That's a lot! But there's a slight problem with all this enthusiasm for direct investing: It is incredibly hard to do. The governance and management hurdles are extremely high. And that's precisely why we launched our direct investment research project a little over a year ago! You can read some of our work in this area here and here.  ]]> http://crgp.stanford.edu/news/global_projects_90_of_infrastructure_investors_are_direct.html http://crgp.stanford.edu/news/global_projects_90_of_infrastructure_investors_are_direct.html Mon, 07 May 2012 13:54:55 -0800 US Infrastructure Investment 'Obviously Sensible' According to The Economist, investing in American infrastructure is an absolute no brainer: "If ever there should have been a policy so obviously sensible as to attract bipartisan support, more money for infrastructure was it. Right now, when it comes to partisan politics, sensibility's got nothing to do with it." So true. ]]> http://crgp.stanford.edu/news/global_projects_us_infrastructure_investment_obviously_sensible.html http://crgp.stanford.edu/news/global_projects_us_infrastructure_investment_obviously_sensible.html Wed, 28 Mar 2012 11:37:28 -0800 How Failing Infrastructure Affects Our Economy Eric Spiegel is President and CEO of Siemens Corporation. He recently gave an interesting interview to Harvard Business Review on the link between economic innovation and infrastructure investments. Here's a blurb: 

"We're now ranked 23rd in the world in terms of infrastructure... The age of our country's coal plants averages in the 40-year range, with a number of plants at the 50-60 year mark. And our electric grid is behind other countries... Take a look at the transportation network. Siemens developed a train in 1903 that would go 150 miles per hour; now we're manufacturing trains that go 230 miles an hour. But in the U.S., trains rarely get above 100 miles an hour because the tracks and control systems are so old. In Germany, they run light rail, medium-speed rail, high-speed rail, and freight rail all on the same tracks, using sophisticated control technology to move trains on and off the tracks. We're way behind...Then there's the aging water infrastructure. When a pipe burst in Vermont, the mayor said, "That pipe's been here since the war." Senator Bernie Sanders who was visiting the small town asked, "What war?" The mayor said, "The Civil War"... Those are just three big examples of how we're running behind. And it has had a big impact on the competitiveness of the country." 

He goes on to explain the link between infrastructure, competitiveness and innovation. It's worth a read. Get the entire interview here. It's worth a read. 
]]> http://crgp.stanford.edu/news/global_projects_how_failing_infrastructure_affects_our_economy.html http://crgp.stanford.edu/news/global_projects_how_failing_infrastructure_affects_our_economy.html Fri, 16 Mar 2012 07:48:46 -0800 The Scope of Financial Institutions: In-Sourcing, Outsourcing, and Off-Shoring
Anyway, with this in mind, one of my current research projects at the CRGP is focused on the pros and cons, constraints and drivers, and principles and policies of in-house asset management at institutional investors. And, as part of this project, frequent co-author Gordon Clark and I have recently completed a draft working paper that outlines some of the theoretical foundations of internal asset management. The paper is entitled "The Scope of Financial Institutions: In-Sourcing, Outsourcing, and Off-Shoring." At issue in this paper is the degree to which institutional investors internalize the tasks and functions necessary to be effective investors. Here's a blurb...
]]> http://crgp.stanford.edu/news/global_projects_the_scope_of_financial_institutions_in-sourcing_outsourcing_and_off-shoring.html http://crgp.stanford.edu/news/global_projects_the_scope_of_financial_institutions_in-sourcing_outsourcing_and_off-shoring.html Wed, 14 Mar 2012 13:06:40 -0800 Chicago Infrastructure Trust: A Step toward Localized Infrastructure Banks? Last week, Chicago mayor Rahm Emanuel announced, alongside Bill Clinton, the Chicago Infrastructure Trust. The idea is that the Trust will leverage private investment for retrofits and improvements. Although the Trust has a lot of political support, it is still pending City Council approval. Additionally, Chicago's long list of political mix-ups has many skeptics wondering if an infrastructure bank is an appropriate step for the city. Emanuel is pitching the Trust as a job creator, an investment to make Chicago competitive, and a move toward environmental sustainability. Emanuel claims that the Trust will create thousands of jobs by putting construction workers back into the field. Additionally, Emanuel and supporters believe that investing in infrastructure will modernize the city and make it more attractive to businesses. Furthermore, many of these infrastructure projects will focus on environmental sustainability. The Trust's first proposed project targets energy inefficiencies. The Trust would invest approximately $200 million in energy upgrades to create a revenue stream of an estimated $20 million annually. ]]> http://crgp.stanford.edu/news/global_projects_chicago_infrastructure_trust_a_step_toward_localized_infrastructure_banks.html http://crgp.stanford.edu/news/global_projects_chicago_infrastructure_trust_a_step_toward_localized_infrastructure_banks.html Thu, 08 Mar 2012 11:42:14 -0800 Chicago Infrastructure Trust: A Step toward Localized Infrastructure Banks? Last week, Chicago mayor Rahm Emanuel announced, alongside Bill Clinton, the Chicago Infrastructure Trust. The idea is that the Trust will leverage private investment for retrofits and improvements. Although the Trust has a lot of political support, it is still pending City Council approval. Additionally, Chicago's long list of political mix-ups has many skeptics wondering if an infrastructure bank is an appropriate step for the city. Emanuel is pitching the Trust as a job creator, an investment to make Chicago competitive, and a move toward environmental sustainability. Emanuel claims that the Trust will create thousands of jobs by putting construction workers back into the field. Additionally, Emanuel and supporters believe that investing in infrastructure will modernize the city and make it more attractive to businesses. Furthermore, many of these infrastructure projects will focus on environmental sustainability. The Trust's first proposed project targets energy inefficiencies. The Trust would invest approximately $200 million in energy upgrades to create a revenue stream of an estimated $20 million annually.
The Trust will leverage the expertise of some of the most influential names in project finance. Potential investors include Citibank, N.A., Citi Infrastructure Investors, Macquarie Infrastructure and Real Assets Inc., J.P. Morgan Asset Management Infrastructure Investment Group and Ullico. However, these equity investors will require high returns if they are to actually invest in a project. Since infrastructure assets do not typically generate high returns by themselves, the Trust will likely have to entice them with inexpensive debt financing. In exchange for the small returns the Trust will make, the equity investors will offer their financial knowledge and resources to the project. Because the equity investors will drive the projects, the Trust will benefit from low overhead costs. As long as the incentives are properly aligned, both parties should benefit.
The materialization of the Trust is still contingent on the City Council's approval; however the outlook appears favorable as the Trust has a lot of political support. If Chicago is able to raise funds for the Trust, the initiative could have far-reaching repercussions. Many large cities will likely follow suit, and the United States may replace the notion of a national infrastructure bank with the development of smaller regional or city infrastructure banks.]]> http://crgp.stanford.edu/news/global_projects_chicago_infrastructure_trust_a_step_toward_localized_infrastructure_banks.html http://crgp.stanford.edu/news/global_projects_chicago_infrastructure_trust_a_step_toward_localized_infrastructure_banks.html Thu, 08 Mar 2012 11:42:14 -0800 A National Infrastructure Bank: Why or Why Not?
President Barack Obama included the formation of a National Infrastructure Bank in his most recent 2013 budget proposal. Obama first proposed the bank last fall but could not find enough support for it on Capitol Hill. The issue is still a divisive one in the House and Senate. According to Democratic Representative John Yarmuth, "It puts American workers back on the job building our roads and bridges, and it opens the door for public-private partnerships by creating an infrastructure bank." Yet Senate Minority Leader Mitch McConnell calls it "bad for job creation, bad for seniors, and...will make the economy worse." This being a presidential election year, the political stakes are high for all Congress people as well as the President. In this brief post, I first present some basic info on infrastructure banks and then consider the pros and cons...

]]> http://crgp.stanford.edu/news/global_projects_a_national_infrastructure_bank_why_or_why_not.html http://crgp.stanford.edu/news/global_projects_a_national_infrastructure_bank_why_or_why_not.html Mon, 05 Mar 2012 13:07:41 -0800 Africa in Need of Creative Infrastructure Financing In a recent interview, Andrew Berg of the IMF's Research Department suggests that Africa could benefit from some creative infrastructure financing. I wonder, has Mr. Berg seen Sokoni? ]]> http://crgp.stanford.edu/news/global_projects_africa_in_need_of_creative_infrastructure_financing.html http://crgp.stanford.edu/news/global_projects_africa_in_need_of_creative_infrastructure_financing.html Sat, 25 Feb 2012 20:26:02 -0800 CalSTRS Invests in Infrastructure to Match Liabilities On Thursday, February 2nd, the Teachers' Retirement Board of the California State Teachers' Retirement System (CalSTRS) voted to lower their investment return assumption from 7.75 to 7.5 percent. This is the second time in 14 months the board has lowered the assumed rate of return. As a result CalSTRS currently has $56 billion in unfunded liabilities. Five days later, on Tuesday, February 7th, CalSTRS announced a $500 million investment in infrastructure. The confluence of these events is significant for two reasons... ]]> http://crgp.stanford.edu/news/global_projects_calstrs_invests_in_infrastructure_to_match_liabilities.html http://crgp.stanford.edu/news/global_projects_calstrs_invests_in_infrastructure_to_match_liabilities.html Tue, 14 Feb 2012 07:42:16 -0800 Obama Emphasizing Infrastructure emphasized the importance of infrastructure investment in bolstering the American economy. Specifically, he proposed using half of the money being saved from defence budget cuts to be put towards rebuilding the nation's infrastructure. Here's a blurb: 

]]> http://crgp.stanford.edu/news/global_projects_obama_emphasizing_infrastructure.html http://crgp.stanford.edu/news/global_projects_obama_emphasizing_infrastructure.html Mon, 30 Jan 2012 13:55:26 -0800 Dear Pension: Can You Please Pay For My Infrastructure? We knew this day was coming. Western governments have finally come to recognize that they: 1) are broke; 2) are unable to repair (or build) their dilapidated (or non-existent) infrastructure; 3) are looking for ways to spur domestic growth (i.e., by investing in infra); and 4) are increasingly keen to tap into the $70 trillion sitting in the world's institutional investors. Here are some of the most recent examples: http://crgp.stanford.edu/news/global_projects_dear_pension_can_you_please_pay_for_my_infrastructure.html http://crgp.stanford.edu/news/global_projects_dear_pension_can_you_please_pay_for_my_infrastructure.html Mon, 28 Nov 2011 15:38:18 -0800 Unlocking Capital for African Infrastructure
Enter Sokoni Africa Infrastructure Marketplace, which is a new technology platform that was recently endorsed by the G20. Sokoni offers a virtual marketplace to bring buyers and sellers of African infrastructure projects together - all to the benefit of Africa! Sokoni is the brainchild of two people: Bobby Pitman of the African Development Bank and Ryan Orr of the Zanbato Group (and Stanford). Given that I share an office with Ryan at Stanford (when he isn't off solving the world's infrastructure problems), I rang him up to get the scoop on Sokoni. Here's our (distilled) conversation: 


]]> http://crgp.stanford.edu/news/global_projects_unlocking_capital_for_african_infrastructure.html http://crgp.stanford.edu/news/global_projects_unlocking_capital_for_african_infrastructure.html Tue, 22 Nov 2011 15:27:39 -0800 G20 Endorses Tech Platform For Infra Investing formally endorsed a new technology platform that will provide a marketplace for buyers and sellers of African infrastructure investment opportunities. The platform (which is being developed by Stanford alumni) enhances the speed and efficiency of asset sales and capital raises by using technology to facilitate the work of those looking to finance African infrastructure assets, as well as potential donors and global capital providers interested in investing in Africa. Congratulations to the Sokoni team on a remarkable acheivement! 

]]> http://crgp.stanford.edu/news/global_projects_g20_endorses_tech_platform_for_infra_investing.html http://crgp.stanford.edu/news/global_projects_g20_endorses_tech_platform_for_infra_investing.html Mon, 07 Nov 2011 12:07:39 -0800 US Administration Expects Infra Deal Before 2012 said on Thursday that he expects Congress to finalize a new infrastructure program before the end of the year. That's the good news. The bad news: the Congressional leadership just said the Administration's plan is "dead on arrival". Alas, the politicization of of key policy issues continues. ]]> http://crgp.stanford.edu/news/global_projects_us_administration_expects_infra_deal_before_2012.html http://crgp.stanford.edu/news/global_projects_us_administration_expects_infra_deal_before_2012.html Thu, 13 Oct 2011 11:41:50 -0800 Infrastructure Investment in Weak Institutional Contexts Maria Victoria Murillo and Alison E. Post have an interesting new paper out entitled, "Infrastructure Investment in Weak Institutional Contexts: Exit Threats and Regulatory Bargaining in the Argentine Electricity and Water Sectors." It's well worth reading, as it rewrites some of the traditional strategies adopted by infrastructure investors in difficult institutional contexts. Here's the abstract:

]]> http://crgp.stanford.edu/news/global_projects_infrastructure_investment_in_weak_institutional_contexts.html http://crgp.stanford.edu/news/global_projects_infrastructure_investment_in_weak_institutional_contexts.html Tue, 27 Sep 2011 10:15:10 -0800