by Tony Davidow, CIMA®, Senior Alternatives Investment Strategist, Franklin Templeton Institute
In the latest episode of the Alternative Allocations podcast, I had the pleasure of sitting down with Michael Bell, CEO of Meketa Capital. Michael and I discussed the growing opportunities within infrastructure investing, the various roles it can play in portfolios, and lessons learned from institutional allocators of capital.
We began by discussing the evolution and adoption of private markets in the wealth channel. “We've seen that mainstream shift really embrace education, which has been proliferated, with books and educational materials in the marketplace. Now we're seeing a shift with advisors in the wealth space who have embraced that education.” As advisors get more comfortable with the investments and product structures, they are beginning to use these tools across their practices.
Given Meketa’s institutional heritage, I probed specifically about lessons learned from institutions in allocating to infrastructure. Michael commented that, “Institutions and sovereign wealth funds have been allocating capital to infrastructure investments for the last 30 years. Now it's opening up for wealth management for the first time.”
Michael shared the areas where he sees the most attractive opportunities, and the themes that will likely play out over the next several years. He discussed the growth in digitization and energy transition. He noted the “massive amount of capital that's needed to support that growth. The transition to the next leg of the evolution of business through digitization is going to need a massive amount of capital.” He added that another trend has been the decarbonization or energy transition.
We explored the versatility of infrastructure investing and the various roles it can play in client portfolios. “Infrastructure can be viewed as an equity investment with bond-like features. Infrastructure can provide strong growth early in the development cycle, and as it matures, it really becomes much more of a yield investment vehicle.”
Infrastructure can also potentially be an effective inflation hedge. “The yield is not susceptible to inflation or rate changes. It's very much protected because most of the revenues that are generated off of infrastructure investments are contracted revenues.” The contracts are typically tied to the rate of inflation and adjust over time.
Lastly, I wanted to address one of the biggest challenges that I hear from advisors, which is manager selection. We addressed manager selection across all of private markets, and the importance of selecting the best managers, and avoiding the laggards.
Dispersion of Returns: Public vs. Private Markets
Sources: MSCI Private Capital Solutions, Morningstar. As of September 30, 2025.
Notes: The returns for Global Active Equity Funds reflect the annualized returns for the period January 1, 2005, to September 30, 2025. The returns for Real Estate, Secondaries, Private Equity, Venture Capital (VC), and Private Debt are the Internal Rate of Return (IRR) of the funds with vintage years from 2005 to 2018, as of September 30, 2025, for funds across all regions. Past performance is not an indicator or a guarantee of future results. Important data provider notices and terms available at www.franklintempletondatasources.com.
With most private markets, there is a large dispersion of returns between the top and bottom quartile managers (see above). Michael noted, “If you spend time evaluating large-cap equity, the manager dispersion between a top quartile manager and a bottom quartile manager may be 2% or 3%. In the private equity space, the difference between a top quartile manager and a bottom quartile manager is not 2% or 3%.” It can be 30%-40% depending upon the time period used.
Michael shared some great insights regarding the growing opportunities in infrastructure investing. We encourage you to check out this episode.
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