Building Resilient Infrastructure: Comparing Options

Infrastructure finance has always been a significant business for private equity firms.  However, there is a growing effort to find more effective and lower cost ways of financing the infrastructure so important to cities, states and the nation as a whole.  This is driven by a perception that private equity firms a) make too much money on managing such projects; b) are too short-term focused to properly invest in projects with 30-plus year lifetimes, and c) do not have proper alignment of interests with the cities, states or federal governments whose projects they are financing.  At the same time, direct investment by local, state and federal government in the same infrastructure projects has been criticised as a) too costly to taxpayers, b) ineffectively managed by staffs not on par with their private counterparts, and c) too tied to political objectives to provide the long-term stability these projects need.

 

Infrastructure Banks have been proposed as an alternative to address these concerns. However, they suffer from a) the need to rely on the political party in control for their funding, b) limitations imposed by governmental agency policy on bank compensation and hiring, and c) a perception of needing to satisfy political as well as financial onbjectives.  

We have developed the Resourcient concept as an alternative that addresses virtually all of the foregoing concerns and provides a financially sound way for cities, states and the federal government to finance necessary infrastructure buildouts.

The graphics below compare each of the a) private equity, b) direct investment, c) pledge fund, d) infrastructure bank and e) Resourcient alternatives.

COMPARISON OF FIVE INFRASTRUCTURE INVESTMENT APPROACHES:

FUND/DIRECT INVESTMENT/PLEDGE FUND/INFRASTRUCTURE BANK/RESOURCIENT CAPITAL