For the reason that variety of funds we will cowl in-depth is smaller than the variety of funds worthy of in-depth protection, we provide one or two managers every month the chance to make a 300-word pitch to you. That’s concerning the variety of phrases a barely manic elevator companion may share in a minute and a half. In every case, I’ve promised to supply a fast capsule of the fund and a hyperlink again to the fund’s website. Apart from that, they’ve bought 300 phrases and exactly as a lot of your time and a focus as you’re keen to share. These aren’t endorsements; they’re alternatives to study extra.
As you learn this, someplace in a brokerage account close to you, individuals are shedding their minds over the OpenAI IPO.
The corporate filed confidentially for its preliminary public providing in Could 2026, working with Goldman Sachs and Morgan Stanley towards a September itemizing. The AI mania that has pushed markets for 3 years now has a brand new point of interest. Traders who missed Nvidia are decided to not miss this one.
Michael Underhill would really like a phrase with you.
Underhill is the co-founder and chief funding officer of Capital Improvements, the sub-adviser to the Cantor Fitzgerald Infrastructure Fund. He hung out with me earlier this month strolling by means of an argument that I discovered, frankly, exhausting to dismiss: the market is obese the factor that wants energy and underweight the facility itself.
Why infrastructure? Why now?
MFO laid out the case for infrastructure literacy in a collection of articles in Q1 2025 (The Local weather Denial Revenue Paradox: Why Infrastructure Traders Win When Governments Retreat, The Rising Tide of Water Infrastructure: A Information for Strategic Traders and Not Constructed for This: The Argument for Infrastructure Investing in an Unstable Local weather), which we prolonged with our Could 2026 protection of actual property (“Time to get actual?”). For newcomers, the quick model: infrastructure property — energy traces, pipelines, cell towers, toll roads, water therapy crops, knowledge facilities, ports — have a cluster of funding traits that set them aside from standard equities and bonds.
Infrastructure investing uniquely offers:
- Inflation-protected earnings. Most infrastructure property have inflation-linked pricing embedded of their long-term contracts. Income grows with inflation relatively than being eroded by it.
- Decrease financial sensitivity. Folks pay their electrical payments and use the roads no matter whether or not the financial system is rising or shrinking. The persistent, near-monopolistic demand for infrastructure providers produces money flows that have a tendency to maneuver independently of inventory market sentiment.
- Engaging historic returns. World listed infrastructure has compounded at 10.4% yearly since 1999, with a relative yield benefit over world equities. Non-public infrastructure has ranked within the high 5 asset courses in seven of the final ten years.
- Real portfolio diversification. Not “a distinct taste of equities … oooo! Let’s all purchase area shares this time” diversification, however the actual type — low correlation to traditional asset courses, pushed by essentially totally different return sources and dynamics.
- Buffered, unglamorous entry to the AI financial system. Somewhat than shopping for AI firms at peak valuations, infrastructure publicity captures the mandatory preconditions for AI: the facility grid, transmission traces, transformers, and the fiber that carries the info. The picks-and-shovels layer, in different phrases, that has to exist no matter which AI firms win.
That final level is the place Underhill’s argument will get notably sharp. The U.S. is presently spending extra on knowledge facilities over a six-year interval than the mixed inflation-adjusted prices of the Marshall Plan, the Apollo program, the Manhattan Venture, and the Interstate Freeway System. But solely a fraction of deliberate capability is definitely being constructed. Microsoft has an $80 billion Azure backlog — not due to chips or stability sheets, however as a result of the grid can’t ship the facility. China added energy capability at eight instances the American charge, whereas the U.S. interconnection queue sits at 2,600 gigawatts with five-year wait instances.
The IMF, inspecting a carefully watched case research, discovered that closing an infrastructure funding hole of roughly 0.35% of GDP yearly — financed by means of public-private partnerships relatively than deficit spending — can produce long-run actual GDP positive factors of 0.4–0.7%. Non-public capital, the IMF concluded, is the best mechanism. The logic of that discovering is precisely what’s taking part in out within the American energy grid disaster: public funding alone can’t shut the hole, and personal capital is stepping in behind-the-meter era, long-duration storage, and utility partnerships as a result of the grid merely can’t sustain.
The spine of the AI financial system, in different phrases, just isn’t semiconductors. It’s vitality and infrastructure.
Why this explicit infrastructure fund?
Right here is the place the dialog will get barely awkward. Take a deep, calming breath, expensive mates.
Most of us can’t simply purchase CAFIX/CFIIX. It’s not accessible at Schwab or Constancy or TD Ameritrade. About 3,000 registered funding advisors have allotted to it — sometimes 5–10% of shopper portfolios — however for those who don’t have an RIA relationship, your direct path is to open an account with Cantor Fitzgerald itself, the place the minimal funding for retail (Class A) shares is $2,500.
The extra essential cause you could not be capable to purchase it, although, has nothing to do with the place it’s bought. It has to do with how you consider your investments.
CAFIX/CFIIX is a 1940 Act closed-end interval fund. That construction exists for a particular cause: it permits the fund to spend money on non-public infrastructure tasks — long-term, illiquid, institutional-grade property which can be usually accessible solely to endowments and sovereign wealth funds — by actually acknowledging that these property can’t be liquidated on demand. The fund gives quarterly repurchase alternatives at NAV, capped at 5% of excellent shares. That’s your liquidity window. There isn’t any different.
If you’re the type of investor who moved from a tech fund to an rising markets fund to a short-term bond fund within the final month, CAFIX/CFIIX is structurally incompatible with the way you make investments. The illiquidity just isn’t a design flaw. It’s the design. The fund can solely supply entry to 30-year energy transmission tasks as a result of it doesn’t promise to return your cash subsequent Tuesday.
For buyers who’ve already solved their liquidity wants elsewhere and are asking what their long-horizon, low-correlation slice of the portfolio ought to do, the case is extra attention-grabbing.
You would take into consideration this as a very distinctive 60/40 fund: it holds one thing within the neighborhood of 60% public infrastructure and 40% non-public infrastructure investments. Throughout the non-public infrastructure slice, about 80% focuses on non-public fairness and 20% on non-public debt. The fund’s 5 largest holdings, as of March 2026, are 4 non-public infrastructure LPs and one public firm (the Williams Corporations). Between them, these 5 comprised 25% of the portfolio. Complete web property had been roughly $685 million. Since inception in mid-2022 by means of Could 2026, the annualized return has been 15.42%, with a cumulative return of 57.6% and a 4% annualized distribution charge.
The gross expense ratio is 4.42%. The web, after charge waivers, is 2.76%. That sounds alarming till you perceive the construction: you’re paying a 1.50% administration charge on high of the charges charged by the underlying non-public funds. You aren’t overpaying for an index; you’re paying for entry to institutional infrastructure investments that, previous to the interval fund construction, had been merely unavailable to buyers of atypical means.
Why Michael Underhill and Capital Improvements?
Mr. Underhill co-founded Capital Improvements in 2007 with Susan Dambekaln. The primary is 100% employee-owned and majority female-owned (Ms. Dambekaln is almost all proprietor). Each of them have a protracted report within the mutual fund trade, together with a stint managing the North Sq. World Sources & Infrastructure Fund (liquidated in 2020 as a result of the advisor couldn’t draw sustainable property), in addition to stints with Alliance Bernstein, INVESCO, Janus Capital, Federated Traders and Sturdy Capital Administration and State Avenue World Advisors, They’ve suggested on or invested in additional than $9 billion price of infrastructure alternatives throughout private and non-private markets. He’s additionally the writer of The Handbook of Infrastructure Investing (2010). That’s a real monitor report throughout a number of market cycles, not a not too long ago assembled crew carrying infrastructure clothes.
I requested Underhill the usual query — earlier than you launched, we already had forty world infrastructure funds available on the market, some with fifteen or twenty years of historical past. Why does the world want another?
Listed below are his roughly 300 phrases:
We’re working in a essentially totally different macro regime, one outlined by persistent inflation, structurally greater long-term charges, & elevated vitality volatility. Conventional portfolios are being repriced as time period premiums rise & Treasury provide expands, placing stress on duration-sensitive property & compressing fairness multiples. On this atmosphere, advisors should rethink diversification to protect actual returns & earnings stability.
Infrastructure & actual property are transferring from satellite tv for pc allocation to core portfolio publicity. They sit on the heart of essentially the most highly effective progress engines: AI, industrial reshoring, and government-backed infrastructure enlargement. These forces are structural, capital-intensive, & multi-decade in length, straight benefiting property equivalent to knowledge facilities, energy era, transmission networks, logistics platforms, and transportation programs.
Probably the most acute bottleneck throughout this cycle is vitality. The AI financial system is constrained not by chips or capital, however by electrical energy. Hyperscale demand is accelerating, but grid capability, interconnection timelines, & era stay inadequate. Markets are obese expertise however underweight the infrastructure required to energy it, making a sturdy, mispriced alternative in vitality & infrastructure.
Importantly, actual property present inflation-linked income fashions, long-term contracted money flows, and decrease correlation to public equities and stuck earnings. Bettering credit score situations additional assist refinancing stability & enticing risk-adjusted yields throughout non-public infrastructure investments.
On the identical time, sturdy world capital flows into U.S. property reinforce a supportive funding atmosphere for large-scale tasks, whereas rising public market focus heightens the worth of diversification.
For monetary advisors, the conclusion is easy: infrastructure is now not non-obligatory, it’s important. In the next inflation, greater charge world, actual property supply resilient earnings, portfolio stability, & direct publicity to the defining financial developments of the subsequent decade. Additionally they present portfolios with tangible asset backing & pricing energy that conventional monetary property more and more can’t replicate, enhancing long-term threat mitigation over full cycles.
The Cantor Fitzgerald Infrastructure Fund (CAFIX) has a $2,500 minimal for retail buyers investing straight by means of Cantor Fitzgerald. Institutional shares (Class I) require a $1,000,000 minimal. The fund fees a 1.50% administration charge with a gross expense ratio of 4.42% and a web expense ratio of two.76% after charge waivers. Class A shares carry a gross sales load of as much as 5.75%. Liquidity is supplied by means of quarterly repurchase gives at NAV, capped at 5% of excellent shares. The fund’s web site is www.cantorinfrastructurefund.com.
