Federal Insurance Office

Federal Advisory Committee 

on Insurance

Infrastructure Investments

How ACLI Is Proceeding 

Perspective On TIAA Infrastructure Investing

11 May 2017

Milum Livesay – Chair, ACLI Infrastructure Investment Working 

Group and Vice President, Accounting Policy, TIAA, Charlotte, NC

TIAA PUBLIC
Infrastructure Investments Particularly

Attractive to Insurers 

+ Key Characteristics

 Strong Fundamentals

– Inelastic demand

– Essential services and products

– Population growth

– Aging existing infrastructure

– Stretched state/municipal 

budgets

– High barriers to entry

– Regulated assets

 Inflation-linked, predictable current 

cash yields

 Opportunity for capital appreciation 

and competitive return

+

+

+

Long-duration

Relatively illiquid

Stable and secure cash flows

Diversification

+ Attractive risk-adjusted returns

TIAA PUBLIC 2
TIAA Infrastructure Strategy

The TIAA direct infrastructure effort builds on over 20 years of project finance, debt, and equity investing 

experience to select and structure direct equity and debt infrastructure investments.

3

 Infrastructure and energy 

portfolio of ~$13 billion in 

size comprised of equity, 

high yield debt, and 

convertible debt1

 Established key industry and 

investment relationships and 

partnerships leveraged 

through our scale and scope 

in the market

 Strategic collaboration with 

internal commodity/energy 

effort that validates 

contracted energy 

infrastructure

 Proprietary pipeline offers 

optimal selection of portfolio 

assets at attractive valuations

 Experienced investment team 

overseeing a global portfolio

Diversified 

portfolio of 

infrastructure 

assets

Disciplined, 

long-term 

horizon 

investment 

approach 

Experienced, 

professional, 

synergetic team

Robust and 

exclusive 

deal 

pipeline

 United States

 Europe

 Australia

Global Footprint

 Toll roads

 Utilities

 Transmission

 Pipelines (oil, gas)

Asset Diversification

 Power-generating assets 

(gas-fired, solar, wind, 

hydroelectric, 

geothermal)

 Ports

 Airports

Additional Opportunities

1. As of March 31, 2017

TIAA PUBLIC
Case Study I-595 Express LLC

TIAA holds a 50% ownership stake in I-595, a major east-west highway in 

southeast Florida structured as the first availability-based road concession 

lease in the United States. 

4

 In October 2011, TIAA entered into a 50% joint venture with ACS Infrastructure 

Development (ACSID), the North American subsidiary of Grupo ACS (Madrid

 I-595 is a major east-west thoroughfare located in southeast Florida and used by 

more than 180,000 vehicles per day – by 2034 that number is projected to grow to 

beyond 300,000

 The Florida Department of Transportation (FDOT) awarded a public-private 

partnership (P3) agreement to serve as the concessionaire to design, build, 

finance, operate and maintain the I-595 corridor improvements project for a 

commitment of 35 years

 The $1.6 billion construction project reached substantial completion in March 

2014 and financial acceptance by the FDOT in June 2014

 Refinanced in 2015 through the taxable private placement bond market; the 

senior bonds and subordinate secured loan currently carry an unpublished A3 

rating by Moody’s 

 Revenues are provided by contractual availability payments as detailed in a 35-

year concession agreement with the FDOT with no traffic demand risk

 2011 North American Infrastructure Deal of the Year by Infrastructure Investor

The purpose of this material is to provide an example of how the portfolio management team evaluates infrastructure and energy projects. All information shown is historical, is 

provided for informational purposes only and should not be deemed as a recommendation to buy or sell the investment shown above, or indicative of future investments by TIAA or 

the proposed Fund.

TIAA PUBLIC
Current Challenges

5

 Stopper is Not Typically the 

Credit Metrics

 Could be a Structural Element’s 

Effectiveness in Mitigating Risk

 Could be Collateral that is Difficult 

to Value

 Right Information to the Right 

People in the Right Format 

Through the Right Channel

 Enormity of the Regulatory 

Review Process and

Limited Resources

 Permits and Approval 

Process Tedious at Federal, 

State and Local Level

 Current Emerging Investment 

Filing Process only Benefits 

the Company that Filed the 

Deal. Limited to a Particular 

Deal for a Particular Length

of Time

 Ideally a Periodic Forum 

Assessing Risks (Other Than 

Credit) that Face Investors 

and Regulators – For 

Example, a Joint 

Industry/Regulator Technical 

Working Group

TIAA PUBLIC
Moving Forward

6

Partner With FIO and Others To Advance This Important Initiative 

Execute on the Public Private Partnership (P3) Model

Insurance Industry Prepared to Provide New, Innovative Approaches to Fill 

Infrastructure Funding Gap

NAIC Foster Advocacy With Governmental Bodies

Never Depart from Core Disciplines of State-Based Regulations, Policyholder 

Emphasis, and Sound Risk Management

Congressional Leadership Support on Interstate Issues

TIAA PUBLIC