Unleashing Impact Capital into the Public Infrastructure Market

Infrastructure is the foundation of economic activity for any community, region, or country. In 2013, the American Society of Civil Engineers, in their Report Card for America’s Infrastructure, gave the U.S. an overall score of D+ — a marginal improvement over the 2009 grade of D. ASCE estimates that if the U.S. continues its historical trends, $1.1 trillion worth of infrastructure needs will go unfunded in the next seven years alone.

Historically, the use of tax-exempt municipal bonds has made US infrastructure projects unattractive to traditional investors. New, more efficient infrastructure delivery arrangements called Community Investment Partnerships (“CIPs”), which are typically not funded by tax-exempt municipal bonds, are attracting investors to the infrastructure asset class. The investment class’ relatively high returns and long lifespan is particularly attractive for pension funds, such as Ullico.

Investing directly in Community Investment Partnerships presents an opportunity for Ullico produce a competitive rate of return for the investors with the ancillary benefit of putting union members to work. However, the regulatory environment for CIPs is extremely varied from state to state across the U.S. and investing in projects can be extremely complex and hazardous.

The SIPA Capstone Team was tasked with providing Ullico guidance on which states provide the most favorable regulatory environment for investing in CIP Infrastructure Projects and how to most effectively navigate the complex process of crafting CIP deals.