Over the past decade, infrastructure has established itself as a critical asset class for investors, supported by compelling investment properties and significant diversification potential. Its role as a natural hedge against inflation and its ability to deliver stable, predictable cash flows have made it an increasingly attractive option for portfolio optimization. Moreover, the growing privatization of public infrastructure has produced a larger universe of listed infrastructure companies, providing investors with straightforward access through the purchase of shares.
A key challenge in this space lies in defining and identifying a global universe of infrastructure companies. LPX AG addresses this by employing a proprietary classification system focused on core infrastructure companies—those that own or operate physical infrastructure networks. Empirical research indicates that the inclusion of basic infrastructure, characterized by natural monopolies and long-term stability, is essential to accurately reflect the risk and return profile of the infrastructure asset class.
As global demand for infrastructure surges in response to urbanization, technological advancements, and sustainability imperatives, basic infrastructure stands out as a pillar of economic and societal development. Its enduring strategic importance, resilient income streams, and natural monopoly characteristics make it an attractive and enduring component of a well-diversified investment portfolio.
Basic infrastructure assets provide essential services with consistent demand, resulting in steady and reliable cash flows. Revenue is often supported by regulated mechanisms like guaranteed agreements or government subsidies making them attractive for liability-matching investment strategies.
Returns on infrastructure investments are relatively unaffected by business cycles, interest rate fluctuations, or stock market volatility, offering low correlation with traditional asset classes and enhancing diversification.
The essential nature of infrastructure services, combined with their stable cash flows, supports high levels of debt while maintaining low default rates and strong credit ratings.
Income streams from infrastructure assets are often linked to inflation through regulated pricing mechanisms, providing a reliable hedge against inflation.
Basic infrastructure assets rely on proven and established technologies, minimizing the risk of technological obsolescence and ensuring consistent performance over their long lifecycle.
Florastrasse 17
8008 Zurich
Switzerland
+41 (0) 44 382 90 20
© 2025 LPX AG. All rights reserved.