Jay Frank, President of Cantor Fitzgerald Asset Management and Michael Underhill, Portfolio Manager of the Cantor Fitzgerald Sustainable Infrastructure Fund join Keith Black, Managing Director, RIA Channel to discuss infrastructure’s evolving role in the modern portfolio.
In an especially tough year for balanced portfolios, demand for alternatives is rising. “I think the use, understanding, application and adoption of alternative investments by advisors, and ultimately their clients, has been increasing over the last several decades,” says Frank. Innovation in product structure, retail investor demand, and the need for diversification beyond traditional asset classes, has paved the way for increased access to alternative investments. Today, the real estate sector dominates retail exposure to alts. “In the next five to ten years, I think we will start to see the mass affluent to high net worth investor start to get exposure to these other alternative asset classes, like infrastructure,” says Frank.
Infrastructure, which covers critical components of our society such as energy, transportation, and utilities, offers a return pattern that’s differentiated from real estate, explains Underhill. An allocation to infrastructure has the potential to provide inflation protection, diversification benefits, and enhanced total returns. Infrastructure megatrends such as decarbonization, digital transformation, and enhancement of aging infrastructure serve as major long-term tailwinds, explains Underhill. Recent bipartisan regulatory initiatives have dedicated hundreds of billions of dollars to address the infrastructure gap in the United States. Underhill estimates that private capital will also play a meaningful role in addressing what he estimates to be a $3.6T infrastructure gap in the U.S. alone.
The Cantor Fitzgerald Sustainable Infrastructure Fund is a continuously offered, closed-end interval fund, designed to provide diversified exposure to private and public infrastructure investments. The fund seeks stable returns, attractive total return potential, inflation protection and lower economic sensitivity.
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