It’s hard to find a locale that doesn’t need a major infusion of money for infrastructure. Emerging markets are undergoing rapid urbanization and rising prosperity. Developed markets including the U.S.—which scored an overall “D+” on the 2013 report card from the American Society of Civil Engineers—need to fix or expand the infrastructure they have.

Big money is being directed at this global challenge. According to a June 2014 report from Pricewaterhouse Coopers and Oxford Economics called Capital Project And Infrastructure Spending: Outlook To 2025, annual global spending on infrastructure is expected to exceed $9 trillion by 2025, up from $4 trillion in 2012.

The analysis covered transportation and utilities, as well as capital projects in extraction, manufacturing and social infrastructure (schools and hospitals). Among its conclusions, it says the Asia-Pacific market, driven by China’s growth, will represent nearly 60% of global infrastructure spending by 2025.
But spending money on infrastructure requires more than throwing spaghetti at the wall and seeing what sticks, even in China. And although investment managers focused on the infrastructure asset class unanimously applaud the diversification, lower volatility and income it offers, how they define and invest in it varies widely.

“There’s a natural need for more infrastructure everywhere,” says Manoj Patel, who, along with Frank Greywitt III, co-heads infrastructure securities for Deutsche Asset & Wealth Management and co-manages the $4.2 billion Deutsche Global Infrastructure Fund (TOLLX).

The Chicago-based co-managers are most concentrated on North America, where the fund had 74% of its assets as of June 30 (53% was in the United States alone). “That’s really where we find a lot of the opportunities,” says Greywitt, given “the energy revolution we’re seeing in the U.S.”

The shale boom is prompting the need for new technology and pipelines to extract and transport cheaper forms of natural gas and liquid natural gas to large cities and to the Gulf Coast for processing, he says. China also factors in significantly to the fund’s U.S. energy strategy, though China-based assets themselves represent just 2% of the fund’s overall assets.