Jagpaul Singh has carved a unique path in the world of investment consulting, with over a decade of experience in sectors including infrastructure, energy transition, and real estate. Based in Greater Hartford, his professional contributions include work with industry leaders like The Carlyle Group and Macquarie Group, where he honed his expertise in alternative investments.
How do you define infrastructure?
Quite simply put, infrastructure assets are the physical networks that are essential to our daily lives. These are physical structures such as toll roads, bridges, pipelines, and utilities that are networks to transport people, energy, and things. As such, these assets have a broad impact on communities and the economy.
When you think about an investment in infrastructure, there are key attributes to consider, the first being the stable and predictable cash flow of operational assets. Monopolistic characteristics are a key feature as that economic “moat” gives the potential for stable returns. Further, in some assets, there are contractual linkages to inflation such that if inflation increases over the year, the asset will increase its fees to the end customer by a formulaic percentage.
What are some of the challenges and opportunities you’ve encountered in the infrastructure and real estate sectors?
Infrastructure and real estate, commonly referred to as real assets, have undergone significant transformation over the past decade. As tangible and essential components of daily life, these assets face distinct challenges and opportunities, particularly as they navigate evolving market conditions, economic shifts, and geopolitical uncertainties. Key challenges include changing regulatory landscapes, which can create risks, especially in geopolitically unstable regions where shifting policies may impact cash flow.
Additionally, rising interest rates have made securing loans more difficult, and persistent inflation may continue to keep rates elevated. Another challenge is the long-term commitment often required for real assets, as many investments in this space demand extended holding periods, tying up capital for years.
Despite these challenges, real assets present compelling opportunities. There is a growing demand for new and existing infrastructure, such as housing and digital networks, which will be essential to meet societal needs. Furthermore, real assets can provide stable, inflation-linked cash flows, making them an attractive complement to fixed-income investments. They also offer diversification, providing exposure to non-traditional sectors such as energy, transportation, and social infrastructure, which can enhance portfolio resilience in times of market volatility.
What are ways to get access to infrastructure and real estate investments?
There are typically two main types of investment products available to gain access to infrastructure and real estate. The first is through listed products such as stocks, ETFs, or mutual funds. During my time at Macquarie Group, this was my primary focus. The key advantage of listed investments is the daily liquidity they provide, allowing investors to easily enter or exit positions with relatively low minimums. This makes it an accessible way to gain exposure to the real assets market. However, a potential downside is that listed investments are still subject to broader market fluctuations. So, even if a company and its assets are generating strong cash flow, the stock price can be impacted by overall market trends.
The second option is investing through private equity (PE) funds, which was my area of focus at The Carlyle Group. The main advantage here is the ability to access a wider range of opportunities, including both large-scale and niche investments that are not available in the public market. Private equity allows investors to engage with projects that might offer higher potential returns due to their unique characteristics. However, PE funds generally require high minimum investments and involve longer lock-up periods, meaning investors' capital is tied up for several years, which can be a drawback for those seeking more liquidity or shorter-term commitments.
How do alternative investments differ from more traditional forms of investment?
Alternative investments encompass a diverse range of asset classes that go beyond traditional investments like stocks, bonds, and cash. They are often less liquid as noted above, meaning they may not be easily bought or sold. But to make up for their illiquidity, while they are generally perceived as higher risk, some may offer the potential for higher returns than traditional investments. In addition, they may be less correlated with traditional markets, which can provide diversification benefits.
How has the infrastructure sector evolved over the past decade, especially with the focus on energy transition?
Infrastructure continues to evolve to meet the dynamic needs of society, largely driven by the global focus on energy transition and sustainability. As countries aim to meet climate goals in the coming decades, there has been a marked transition from traditional fossil fuels to renewable energy, such as solar and wind. Investments in electric vehicle (EV) infrastructure, such as charging stations, have expanded, supporting the shift away from fossil fuel-powered transportation. But there is a long way to go before EVs become mainstream.
What are your thoughts on the future of infrastructure development, especially in the context of climate change and sustainability?
Infrastructure projects increasingly align with broader sustainability goals, focusing on social equity and accessibility, ensuring that underserved communities benefit from energy transition efforts. Once an afterthought, climate change and its impact on our communities (flooding, extreme weather events) have forced us to incorporate resiliency measures when building new and updating existing Infrastructure.
How do you see the role of alternative investments in addressing global challenges like sustainability?
Alternative investments are uniquely positioned to tackle global sustainability challenges by mobilizing capital, fostering innovation, and driving systemic change across industries. Funding for energy infrastructure – including smart grids and electric vehicle charging stations – is vital for supporting sustainable energy systems.
As investor interest in sustainable practices continues to grow, the integration of sustainability into alternative investment strategies will likely expand, contributing to a more resilient and equitable future.
