Institutional Investors and Infrastructure Investing

92 Pages Posted: 24 Sep 2018 Last revised: 15 Mar 2021

See all articles by Aleksandar Andonov

Aleksandar Andonov

University of Amsterdam and CEPR

Roman Kräussl

Bayes Business School (formerly Cass); Hoover Institution, Stanford University; Centre for Economic Policy Research (CEPR)

Joshua D. Rauh

Stanford Graduate School of Business; Hoover Institution; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: March 2021


Institutional investors expect infrastructure to deliver long-term stable returns but gain exposure to infrastructure predominantly through finite-horizon closed private funds. The cash flows delivered by infrastructure funds display similar volatility and cyclicality as other private equity investments, and their performance depends similarly on quick deal exits. Despite weak risk-adjusted performance and failure to match the supposed characteristics of infrastructure assets, closed funds have received more commitments over time, particularly from public investors. Public institutional investors perform worse than private institutional investors, and ESG preferences and regulations explain 25-40% of their increased allocation to infrastructure and 30% of their underperformance.

Keywords: Infrastructure, Public Pension Funds, Institutional Investors, ESG regulation

JEL Classification: G11, G23, G28, H54, H75

Suggested Citation

Andonov, Aleksandar and Kraeussl, Roman and Rauh, Joshua D., Institutional Investors and Infrastructure Investing (March 2021). Stanford University Graduate School of Business Research Paper No. 18-42, Available at SSRN: or

Aleksandar Andonov

University of Amsterdam and CEPR ( email )

Plantage Muidergracht 12
Amsterdam, 1018 TV


Roman Kraeussl

Bayes Business School (formerly Cass) ( email )

Hoover Institution, Stanford University ( email )

Stanford, CA 94305
United States

Centre for Economic Policy Research (CEPR) ( email )

United Kingdom

Joshua D. Rauh (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Hoover Institution ( email )

Stanford, CA 94305-6010
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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