In general, Scott isn’t optimistic about global infrastructure spending over the next year or so. Europe is still recovering from the economic crisis and loan growth is low, he says, and “China’s property market got ahead of itself in terms of urbanization trends.”

However, he anticipates significant infrastructure spending in China over the long term. Its urbanization rate—the number of people living in cities divided by its total population—is projected, he says, to jump from a current 52% to 70% by 2030 as 15 million people move each year from rural areas to cities. “That’s like every year building a city with the population of [greater] Los Angeles,” he says.

Scott expects attractive opportunities among companies that invest in public-private partnerships. It’s a popular business model in Europe, and many states have approved legislation to allow them, he says. The partnerships build, run and assume risk on infrastructure projects, reducing the burden for governments. He is monitoring several publicly traded European infrastructure companies—Ferrovial, Vinci and Skanska—that invest in these partnerships.

Infrastructure isn’t for everyone. The T. Rowe Price Global Infrastructure Fund, launched in 2010, was supposed to give investors growth and yield with inflation protection. But, says company spokeswoman Kylie Muratore, the fund “showed limited inflation protection and greater volatility and market risk.” Its assets also grew very slowly. In early 2014, the company merged the fund with the Real Assets Fund, and its exposure to infrastructure is now minimal.

Overall, though, fund-flow tracker EPFR Global has observed a strong upward trend in infrastructure fund flows over the past year. So investor interest in the sector is rising.

“At the end of the day when you look at the assets, they offer stable and predictable cash flows,” says Patel. “Their returns have broadly been in line with global equities, but their volatility has been 25% to 30% lower.”

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