Watson, Felli, Wood and Dowdeswell: Unlocking investor interest by reinventing the demand-side

From the Introduction:

The world is becoming smaller, older, more city focused, more cautious and more polarised between rich and poor. And if that is not enough, the climate is changing, food prices will rise, governments are withdrawing from social contracts and economic power is shifting. While innovative social infrastructure is fundamental to vibrant and resilient communities in this changing world, there are too few public resources available to address the infrastructure gap especially in the EU. This is compounded by a degree of uncertainty among public authorities about whether, when and how private investment is the right path to take. There are common challenges and opportunities here for institutional investors and demand-side public authorities.

Good solutions will need, among other things, new thinking and approaches to private sector investing in social infrastructure and associated public service renewal. Putting into play some predictable preconditions are essential for generating investable and resilient social infrastructure projects that are to scale for long-term investing. For institutional investors this is not about using them as shock absorbers against some of these macrotrends. There is a basic need for more informed dialogue and behaviour between Institutions that carry out maturity transformation for savers, intermediaries who act as a conduit for funds, and end-users that place investments in physical and human capital. In short, in a networked and shared economy, investors, intermediaries and end-users need to be more proactive in delivering patient and productive capital. This briefing paper looks at the why and how of the need to reinvent the demand-side as part of this paradigm shift. In particular, a new Trans-European Network for Social Infrastructure and a Pathfinder Programme will help facilitate the required shift.

Available for download here.