Infrastructure is at a “pivotal moment” in its development, marked by many market participants asking “what’s next?” in the development of this fast-growing asset class, according to one of the leaders of private equity firm Kohlberg Kravis Roberts’ infrastructure team.
The market is poised to choose between a “version 1.0” and a “version 2.0” of infrastructure investing, said Lipschultz.
Version 1.0, he said, did not deliver on its promises because it didn’t bring together “the toolkit it would take to ultimately deliver an attractive return for investors”. As a result, general partners in the asset class over-promised and under-delivered to the early adopters of the asset class.
Version 2.0 will provide that toolkit, which consists of investing expertise, operational expertise and stakeholder management.
Lipschultz also described how he has built out his firm’s infrastructure team to equip it with such a toolkit and how KKR views infrastructure assets and the overall investing opportunity in the sector.