Note: This refers to already built, pay-per-use or recurring fee type of assets, such as water utilities, highways, and power transmission lines.

http://www.ft.com/cms/s/0/98b0bdd4-7...0779fd2ac.html

Not enough assets to buy. Re-privatizations are recycling already privatized assets. The market enthusiasm has gotten ahead of local governments' willingness to sell.

The enormous growth of infrastructure funds is based on demand from long-term institutional investors – pension funds in particular. At best, infrastructure assets ought to be a proxy for index-linked government bonds – which are long-dated, low-risk and inflation proofed. Given that those bonds are formidably expensive, it is worth paying up for alternatives.

But that really applies only to established infrastructure in mature markets. If you build an airport in a developing country, you are taking on construction risk, operating risk, political and regulatory risk and so on. That calls for correspondingly higher returns. In fact, you have left the world of infrastructure funds for the world of private equity.
There is a contradiction between low-return, low-risk infrastructure assets, and high-fee private equity services which are required to develop the assets.