Sovereign Fund Eyed for U.S. Infrastructure (Market Watch)
Vij Ramachandran was quoted in a MarketWatch piece on her research on sovereign wealth funds.
WASHINGTON (MarketWatch) — The U.S. should make it easier and offer incentives for cash-rich sovereign wealth funds to invest in American infrastructure, a leading think tank urged Friday.
The Brookings Institution, in releasing a study on the issue, said U.S. policy makers should generally become more open to foreign investments and specifically may want to offer tax breaks and loan guarantees to get funds like the China Investment Corp. and the Government of Singapore Investment Corp. with some $4 trillion in assets investing in U.S. infrastructure.
The study — co-authored in part by representatives of firms that would likely be intermediaries for such investments, including Goldman Sachs /quotes/comstock/13*!gs/quotes/nls/gs ( GS 159.23, -1.45, -0.90%) , Blackstone Group /quotes/comstock/13*!bx/quotes/nls/bx ( BX 16.77, -0.54, -3.09%) and Silver Lake Partners — say the sovereign wealth funds could fill a gap by investing in infrastructure that the U.S. is having difficulty financing on its own. A White House proposal last year to create an infrastructure bank has been pretty much ignored by Congress, and municipalities are having to pay greater interest rates when issuing debt.
“There’s a desperate need for alternative capital,” said Vijaya Ramachandran, senior fellow at the Center for Global Development and one of the co-authors. And sovereign wealth funds are an obvious target for infrastructure funds because they seek long-term, low-risk investment.
