CA Searches for Investors for its High-Speed Rail

James Nash reports that Gov. Jerry Brown is turning to the $6 trillion market in sovereign wealth funds, pensions, and endowments to help fill the $55 billion gap between the project's total cost and what state bonds and federal grants will cover.
December 3, 2012, 1pm PST | Jonathan Nettler | @nettsj
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Governor Jerry Brown and California state leaders are banking on the increasing interest in public works investments to help fund the most expensive public-works project in U.S. history. "Public works projects have become more attractive to investors seeking stable, if modest, returns in a volatile climate, said Bradley Morrow, a senior consultant for private markets at Towers Watson & Co. (TW), a New York-based professional- services company," writes Nash. “'It’s becoming more accepted as an asset class for institutional investors in North America,' Morrow said, referring to a range of capital projects and not rail specifically."

"The $68.4 billion project, linking San Francisco with Los Angeles, is counting on $10 billion in bonds authorized by voters, $3.3 billion committed by the federal government and as much as $55.1 billion from private sources."

“We have active interest in and outreach to sovereign funds and foreign consortia that are looking at us,” Jeffrey Morales, chief executive of the California High-Speed Rail Authority, said Nov. 29. In addition to sovereign wealth funds, or state-owned investment pools, other potential investors include companies that will build and operate trains and stations, he said."

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Published on Monday, December 3, 2012 in Bloomberg BusinessWeek
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