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International Infrastructure Investments

Written By Brian Hicks

Posted October 9, 2007

As new markets develop around the world, strong sources of power and lines of communication need to be established and boosted. Infrastructure is the industry behind everything, and no portfolio is complete these days without an infrastructure investment.

Napoleon found out the hard way–you can’t sustain an advance without supplies. His armies marched into Russia with half a million men, all greeted by burnt fields and storehouses. Famine led to retreat, and today we remember Napoleon as much for this folly as for his many victories. On the same note, the economies of places like India, Colombia, Egypt and countless other countries on the upswing will wither despite all their best intentions unless they can get power lines, pipes, highway (and all the switches and sensors to keep these conduits moving) into place to expedite commerce.India alone is undertaking an infrastructure buildout worth over $150 billion.

This includes projects for power generation, mining, road and port construction, water delivery, factory complexes, airports, railways…you name it, and India needs it.

Roadblocks to Success

Infrastructural deficiencies and major bureaucratic roadblocks are often cited as the most serious impediments keeping India from passing China as the champion of the developing world.

But, more and more, there is a chance for the private sector to plow its way through the muck of paperwork and get down to business that helps link entire countries together. Public-private partnerships (PPP or P3) are all the rage.

Think about it: governments that have long been bogged down in fending off military coups and outside agitation are most concerned with establishing a functioning society from the top down. The ultimate quandary, though, is whether peace should bring prosperity or prosperity should bring peace, and how quickly average citizens will have access to new opportunities.

In many precarious emerging countries like Nigeria and Kazakhstan, natural resources have flooded national economies with capital, and they don’t always know what to do with it. Ostentatious palaces and Mercedes limousines are always a tempting enhancement, but they do not turn money into financial health.

Public-private partnerships raise many questions, as companies can be accused of over-billing or intentionally taking too long to complete projects on the taxpayer’s dime. But the “private” end of a PPP is hardly insulated from risks:

  • National credit ratings can plummet.
  • Regulatory burdens may squeeze out initial contract-holders.
  • Political turmoil is a constant threat.

Australia’s Macquarie Bank has launched almost a dozen listed infrastructure funds in the past decade, and Goldman Sachs, the Carlyle Group, and Morgan Stanley have all raised billions of dollars a piece for investment in projects that are sometimes conducted through PPP consortia and sometimes directly through governments.

This isn’t just a developing-world problem… 

The American Society of Civil Engineers estimates that $1.6 trillion should be put into United States domestic infrastructure over the next half-decade, with over a quarter of the country’s bridges already considered technically obsolete.

These figures gained heavy media attention in the wake of this summer’s I-35 highway bridge disaster in Minneapolis.

As throngs of migrants pour from rural areas into the capital cities and factory centers of burgeoning industrial powers, the strain on roads, sewers, and even phone lines could lead to a buckling under pressure. In unstable countries, this could mean widespread rioting and even a coup.

Soaring Infrastructure Investments

About a year ago, I launched my Orbus Investor international stock recommendation service. Out of four original portfolio stocks, not one has lost money, and nearly all of my subsequent “buys” have been winners.

One infrastructure investment in particular has capitalized on global growth in a comprehensive way, and I have chatted with executives face-to-face about just how nimble their company is for such an intercontinental corporation. From public transportation, to renewable energy, to undersea cables linking power grids together, they’ve got what it takes to keep the lights on in the 21st century world.

he stock? It’s about to break a 100% gain in just under a year, and I don’t see it slowing down any time soon.

I’ve prepared a special report on the company that I’d love to share with you, along with over a dozen other recommendations and timely updates on how to profit from international supertrends like infrastructure, telecoms, and resource depletion.

The world awaits you. Click here to learn more:


Sam Hopkins