Infrastructure has become a critical focus as asset managers look for new sources of cash flow and governments tap financial partners to help shoulder the cost of public services. Real assets can range from capital-intensive economic activities (e.g., power transmission, highways, airports, etc.) to social infrastructure (e.g., senior housing, student housing).

Real asset investments offer notable appeal because their underlying demand drivers are often not correlated across asset types or with traditional real estate sectors.

This graphic illustrates how real asset demand drivers are correlated both with each other and with macroeconomic factors. The correlation is notably different for demand drivers for economic infrastructure—which are inherently pro-cyclical—and social infrastructure, which are often driven by demographic shifts.

FIGURE 1: Correlation Coefficient Between Real Asset Demand Drivers and Macro Factors