WEALTH
2c0esX1
2c0esX1
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
MACRO<br />
Wealth funds<br />
would give the<br />
public-private<br />
partnerships<br />
concept a new<br />
lease of life<br />
If implemented rigorously, the concept<br />
would be the closest thing to a free lunch in<br />
economics: better infrastructure driven by<br />
increased investments, and financed not by<br />
higher taxes or more debt but solely by<br />
managing existing public assets more<br />
efficiently. The idea is worth trying: it might<br />
become the game-changer in infrastructure.<br />
It would also open up investment<br />
opportunities for long-term investors who<br />
are held back by constraints ranging<br />
from a complex regulatory landscape to<br />
underdeveloped market structures. But<br />
the most crucial problem is a scarcity of<br />
suitable investment objects. Despite all the<br />
talk about the necessity to rebuild and expand<br />
infrastructure, the pipeline of projects is<br />
more of a pipe dream.<br />
To overcome these challenges, we need to<br />
address the big issues, from rethinking<br />
accounting standards to creating a tradable,<br />
global infrastructure asset class. This also<br />
means changing our thinking on “public”<br />
infrastructure. The establishment of wealth<br />
funds creating transparency and managing<br />
public assets could be an important step.<br />
This would release the potential of longterm<br />
investors to act as risk absorbers. They<br />
can foster financial stability by holding assets<br />
through economic cycles; they can promote<br />
growth by being long-term reliable financiers<br />
for investments and innovations; and they can<br />
help ensure social stability by shielding their<br />
clients from financial risks associated with<br />
old-age provisions. Public wealth managers<br />
would be their natural partners in this.