Hot Spots for Investments in Infrastructure

Greg Wheeler
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The engineering industry is thriving around the world, so it's not a huge surprise that some private investors may be interested in investing in infrastructure projects. While infrastructure projects are common in most areas, it isn't always easy to determine the hot spots. However, if you follow the news trends and analyze areas that have a high demand for civil engineers, you can determine where the infrastructure hot spots are.

According to CNBC, Brazil's economy is forecast to expand throughout 2013, and investors are jumping at the opportunity to be a part of an infrastructure investment in Latin America. Companies are concentrating on the country's infrastructure system so that they can improve its logistics. The 2016 Summer Olympic Games are also being held in Rio, making it imperative that the city's roads and bridges are in good shape. Because of all the growth that's planned, it makes sense to invest in Brazil's infrastructure system. However, it can be difficult to invest in Brazilian infrastructure projects because the majority of the country's cement, construction, and engineering companies are privately held. One infrastructure stock in BlackRock Latin America Fund's top ten is holding steady—CCR, Brazil's largest toll-road operator. According to William Landers, head of Latin American equities at BlackRock, any stock related to urban transit in Brazil is attractive right now.

The deteriorating condition of the United States' infrastructure system could present you with the opportunity to invest in an area before it becomes overly popular. According to CNBC, the American Society of Civil Engineers (ASCE) has given America's infrastructure a near-failing grade. Coast-to-coast roads, bridges, and other infrastructure projects are in dire need of repair, and civil engineers are in high demand. Because of this situation, investment firms, including BlackRock Inc. and Allianz Global Investors, are eyeing infrastructure markets in the United States. According to Chris Wrenn, co-head of European infrastructure debt at BlackRock, the company anticipates the United States' yield on infrastructure debt to outperform US Treasuries by approximately 2.50 to 3 percent, which makes investing in infrastructure projects in the United States a good option for investors looking for safe, stable assets that will produce long-term returns.

Another area that's considered an infrastructure investment hot spot is Mexico. According to Dean Newman, the head of emerging markets equities at Invesco Perpetual, economic activity in Mexico slowed down during the first quarter of 2013, but it's slated to rise again. The Mexican government plans to spend four trillion pesos on rail, road, and port projects over the next five years.

While it's always important to weigh all your options before you invest in any company or project, investing in infrastructure projects will always be available. The world can't function without a successful infrastructure, so if you're looking to invest, all you have to do is find the latest hot spot.

(Photo courtesy of digitalart /


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