Rupin Banker on connecting global investors with emerging-market infrastructure

Global investors want exposure to the world's fastest-growing economies, and those economies need new roads, power and ports to sustain their growth. For Rupin Banker of Strategic Global Alliance, an international financial advisory firm, the opportunities are found in the projects that connect the two.

Banker has spent more than three decades in trade, infrastructure finance and cross-border investment, and advises governments, developers and institutional investors across India and South East Asia. He also founded The Banker Group and UAE-based Royal Fort Infracom.

"Our purpose is to enable rapidly expanding emerging markets to access the capital they need to meet their infrastructure commitments at scale," he told CFOtech. "We work at the intersection between the institutional investors looking to access major infrastructure investments across these emerging markets and governments seeking public-private partnerships."

An important part of that is structuring public-private investment opportunities properly to meet the demands of the world's biggest investors.

"There are significant returns to be made, but investors don't invest on that alone," Banker added. "There are levels of complexity that need to be anticipated and mitigated, principally around execution risk."

Rupin Banker, whose firm focuses mainly on India and South East Asia, said European and American pension funds need a contracted revenue stream, a legal framework that holds up if things go wrong and governance that meets their standards. Their liabilities run for decades, so certainty and a clear allocation of risk come first. But the big deal-breakers are typically an imbalance of risk allocation between government and investors, and currency risk. 

India's roads show what the right structure can do. Many toll projects there stalled a decade ago when developers carried the traffic risk, so the Indian government now takes that risk on most new roads and sells operating ones to long-term investors, including Canadian pension funds.

"Putting each risk with the party best placed to manage it is what turns a major infrastructure project investors will avoid, into one a pension fund is happy to hold for the long term," said Banker.

For Banker, the case is social as well as financial. "A good road, power line or port connects people to jobs, markets and services, and that public value keeps a project supported for decades, which is the certainty a pension fund wants," he said.

Shared rulebook

Sovereign wealth funds and Western pension funds can share a capital stack without sharing goals, Banker said, as long as they follow the same rules. He cited India's National Investment and Infrastructure Fund, which in August brought in a subsidiary of the Abu Dhabi Investment Authority and Temasek alongside Canadian and Australian pension funds.

"What makes it work is governance - a pension fund has to be confident that decisions are commercial rather than political, particularly when a state is also an investor," said Banker.

The harder points, he said, are agreed upfront: which law applies, where disputes are settled and how each party exits, since a sovereign fund may hold for decades while a pension fund may need to sell.

"The most expensive thing a government can do is change its mind," added Banker. "At that point, the investor sees a contract that may not hold. The governments that close deals are the ones that settle the hard questions before they go to market."

Sector split

Of roads, ports and energy, he said energy is the easiest to sell to foreign capital because long-term power contracts are a model investors know. Energy accounted for around two-thirds of private infrastructure investment in developing economies in 2024, according to World Bank data.

New toll roads are the hardest where the investor takes traffic risk, which is why India changed its approach.

Ports sit in between, he said, though commitments can run for decades, as DP World's 50-year concession for two new terminals at Fujairah, signed in July, shows.

India and South East Asia

Asked which is easier for foreign capital, Banker said both have real strengths. South East Asia draws several times more foreign direct investment than India, though much of it goes into manufacturing rather than infrastructure.

India, he said, has made projects investable through a standard contract model for roads, investment trusts that let foreign funds buy into operating assets and a published pipeline of 852 public-private partnership projects.

Each needs its own approach: South East Asia's markets have different legal systems and currencies, while in India the cost of hedging the rupee over an asset's life must be built in.

When US and European interest rates were close to zero five years ago, he said, Western investors hunting for yield were more forgiving of projects not quite ready, but with ten-year US Treasuries now paying above 5.2 per cent, the highest since 2002, the premium has to be real and the risks properly priced.

"Cheap money used to cover for weak preparation, and that cover has now gone. But the investors are there and so is the need, and the countries that prepare their projects properly will find that the capital follows," said Banker.