Infrastructure Takes Hit
By Paul Glader
Infrastructure funds are in trouble. Will the infrastructure
builders be next?
Last week's resignation of the chairman of Australia's Babcock & Brown Ltd. highlighted the risks of financial engineering and heavy borrowing to buy and operate assets such as airports and power plants. Shares in the company have plummeted 92% from their peak.
There has been a parallel investing boom in the energy companies, contractors and heavy-equipment makers benefiting from a surge of big-ticket projects in fast-growing economies, such as China, India and the Middle East. Barclays Global Investors launched the iShares S&P Global Infrastructure Fund in December; Dow Jones, ...
