| NEW YORK
NEW YORK May 31 Investors poured an estimated
$316.6 million into infrastructure-focused U.S. mutual funds and
exchange-traded funds in May, according to preliminary data by
fund-tracker Morningstar Inc. on Wednesday, extending a monthly
inflow streak since the presidential victory of Donald Trump.
The latest figures suggested investors were warming to the
president's budget proposal, unveiled last week, which calls for
$200 billion in federal infrastructure funds with hopes to
leverage $800 billion more in private and state government
Investment firms including BlackRock Inc, the
world's largest asset manager with $5.4 trillion in assets under
management, Blackstone Group LP, the world's biggest private
equity manager, and Jeffrey Gundlach's DoubleLine Capital have
been active in the sector.
BlackRock has been building up its infrastructure unit,
started in 2011. It works on public-private partnerships
globally, and on complex endeavors that can range from wind
farms to transportation projects, financed by equity or debt.
Last week, BlackRock announced the creation of a $280
million infrastructure debt fund that will be focused on
highways and other infrastructure projects in Colombia.
For its part, the $450 million DoubleLine Infrastructure
Income actively invests in three sectors of
infrastructure credit: corporate bonds, structured product (also
known as asset-backed securities) and project bonds. It is the
only taxable bond mutual fund for investors who want to invest
in non-municipal infrastructure credit, a space otherwise
dominated by insurance companies and other institutional
Infrastructure debt finances projects, assets or companies
that provide essential services in strategic sectors of the
economy. Investments can include debt that finances airports,
toll roads, power plants and renewable energy. It can also
include investments secured by infrastructure-related assets,
such as aircraft, rolling stock and telecom towers.
"Infrastructure debt is a surrogate for investment-grade
corporate bonds," Gundlach said in a telephone interview. "These
are vastly more secured with assets pledge to them and all are
investment-grade rated and dollar-denominated. I consider them
much safer and they yield more and have shorter duration."
Overall, institutional investors have historically invested
in infrastructure mostly through private equity. Infrastructure
debt, however, is a nascent investment opportunity that has
arisen over the past several years due to increasing regulatory
constraints on infrastructure lending (such as Basel III), said
Damien Contes and Andrew Hsu, who oversee the DoubleLine
Infrastructure Income Fund.
So far this year ended May 30, DoubleLine Infrastructure
Income has posted returns of 3.66 percent, surpassing 95 percent
of its category group.
(Additional reporting by Trevor Hunnicutt; Editing by David