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Gruppo Levey CEO Claire Gruppo on using public-private partnerships to boost investments in infrastructure projects.
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While gas prices rise many of the roads highways and bridges that we drive on are in desperate need to prepare the battle over how to pay for those repairs will be a critical issue in the years ahead as many of these cities and towns -- simply can no longer afford to do it.
Our next guess it's found one possible solution.
A public private partnership for infrastructure funding clear group -- CEO and but emanate firm -- -- and she joins us right now in.
Barcelona -- -- start to say -- public private I get nervous the yellow flag red rising.
Yeah if -- just the public private I don't I don't I don't.
Where does maintain did you know has become tainted I think in and over over what we seen in in terms of failures -- Doesn't are gonna you gonna put up the -- -- gonna reap the rewards and he got up -- who's gonna shoulder to risk in this new set up that you do out of business.
Well one of things you have to keep in mind I mean it's no surprise anyone that the infrastructure in this country.
Is in desperate need of repair -- would see it right here in our city all the time.
Across the country it's happening is well.
And globally in terms of new infrastructure in being able to raise capital for new infrastructure you know this is really.
On but what you're permits taking -- unique approach towards that yes we are.
On and we're basically saying that essentially what happened is that the typical ways of funding infrastructure projects.
Over decades have fallen apart.
You know the European banks he's -- a significant amount of funding of projects on the project -- -- both.
Globally and in this country and they stop doing that in the fourth quarter last year for obvious reasons.
And it is very difficult for public.
Municipalities.
Towns states.
To raise the capital that they need grooming municipal offerings and -- off.
-- -- incentive in the driver for and that the for private investor is when you see possibly your counterparty the municipalities that are having a hard time just managing their own budgets.
And there's be seeing revenue decreased as part pairing up with that.
With a partner who may not be able to hold up its and a bit of bargain at the end of the day well.
The first off you know you have to that the the projects that are gonna be the easiest to get done in that you know in -- you know there's a good credit rating right on Monday of either the municipality or the entity.
On that's first you know one to the project itself.
Has to be relatively stable could be revenue generating.
So that there is a way for the investor the private investor in the project to reap the reward in the benefits.
And the municipality or the state.
You know has a way to start the projects more quickly rather than relying on raising the funds.
Totally reliant on their own.
There is a daily talk about -- -- you talk about these private partnerships adding -- -- capital coming from.
Actually coming from relatively new sources that have not typically.
Invested in these kinds of entities are in these projects but the -- and Tucson and yes that's correct correct.
Pension funds.
Insurance companies.
Sovereign wealth funds.
These are very large pools of capital that are looking for steady returns -- You know you read the the -- disaster in Harrisburg Pennsylvania.
-- -- and then you go back you wonder okay who exactly determines if the municipality even has the expertise to generate revenue.
From from the underlying project -- it.
That's it is this -- who does that due diligence is that something that you're.
Or will be responsible for ore buyer beware -- actually I'm so.
You know if you are going to.
Have a practice in that emanate part of this and putting the whole thing together.
Then it's you know important that you do your due diligence make sure the transaction can get done right.
So if it's not going to get done it's not one that we would take on this but -- -- well of course.
This is relatively new.
What kind of sits there has successfully is seeing so far I mean is are a lot of people with so -- kicking the tires and it's thing.
Yes that actually I've been I've been so surprised by the ramp in this business -- we started.
Focusing on this infrastructure opportunity on public deprive it about six months ago and we probably have forty active transactions clearly -- -- line before we let you go.
Any ratings are are these projects rated by the rating agencies that's typically they are OK and then there's there's sort of threshold that they have to meet in order for the -- for the go through it depends on the investor obvious -- but.
But as Clinton yes I -- -- -- Read anything like that.
48 street -- get off the west side -- -- -- I'd appreciate -- yeah.
Yeah.
Yes kind of.
Local group believing company.
