Investment Impact of $1 Trillion Infrastructure Measure Seen as Mixed by Industry Lawyers and Consultants

Industry lawyers and consultants predict the recently enacted $1 trillion infrastructure measure is likely to create more investment opportunities for private-equity firms in areas they already favor, such as telecommunications, while doing little to expand their presence in the government-dominated transportation sector. The Infrastructure Investment and Jobs Act, which President Biden signed in November 2021, designates $550 billion for such things as roads and bridges, the power grid and broadband internet systems (with $65 billion of this allocated to broadband specifically). The funding can enhance the attractiveness of investment opportunities that previously appeared uneconomical, said Mike Parker, Americas infrastructure leader at consulting firm Ernst & Young. He cited as an example the expansion of broadband internet in low-income and rural areas. “The bill is providing funding that allows for the last mile for certain households that would not otherwise be able to afford the service,” Parker said. “This is going to create the opportunity both for private capital to serve them as customers and for broader investments in fiber and data centers.” But the new law is less likely to create many more opportunities for private-equity firms in projects, such as building roads and bridges, that traditionally have been financed with public capital, said Kent Rowey, a partner at law firm Allen & Overy LLP who works in its global projects, energy, natural resources and infrastructure practice.