Despite a “breathtaking” amount of capital already invested in infrastructure funds, investors will likely continue to find solid, high-return investments in the sector, said experts who spoke at an event in Toronto on Monday.

It’s estimated in the next 10 years, demand for infrastructure investments globally will total between $8 and $9 trillion, said Marcus Turner, a senior consultant at Towers Perrin, speaking at an event on the opportunities and risks of infrastructure investments organized by the Toronto CFA Society.

Between massive demand for infrastructure in developing countries and the ongoing need for infrastructure replacement in developed countries, Turner said there will be no shortage of opportunities in the sector in the years to come. And, he said, investors are noticeably confident about this, he said: “There’s still a lot of pent-up demand, or interest, in this particular asset,”

However, the sudden influx of investment in recent years has raised concerns that an oversupply of infrastructure investment funds could drive down returns in the sector, Turner added.

“There’s been a tremendous increase in the number of fund managers offering these funds,” he said, adding that some managers have begun to scale back their expectations in returns from the sector.

But with such robust opportunities ahead and a number of appealing characteristics in infrastructure investments, Turner said he’s confident the sector remains attractive from an investor’s standpoint.

He pointed to such attractive characteristics as strong long-term cash flow, low elasticity of demand, and protection from inflation, as income in the investments is correlated to user fees that rise along with the consumer price index.

As an added bonus in the current market environment, credit markets tend to impact the infrastructure sector less than other asset classes, said James Cowan, managing director of Macquarie North America at the event.

Although infrastructure companies tend to have high levels of debt and a need access to credit markets, Cowan said companies with strong track records have no trouble accessing debt.

For such reasons, infrastructure is becoming an increasingly popular investment, particularly among pension plan managers in Canada. The Colleges of Applied Arts and Technology Pension Plan, for instance, recently committed about 5% of its portfolio to infrastructure investments, said the plan’s chief investment officer, Julie Cays.

“Infrastructure was chosen because we felt it was the least crowded and least overpriced [asset class],” she said at the event.

Although it’s too early to say whether the portfolio will prove a successful strategy, Cays said she’s confident in the infrastructure investments since their potential returns are higher than other liability-hedging asset classes.

But just like any other investment, infrastructure also boasts risks. For instance, public projects involve political risks, particularly in developing countries. There are also operational risks, as some projects fail, as well as regulatory risks.

Infrastructure companies are also known for high leverage. But for companies with stable cash flows and steady earnings before interest, taxes, depreciation and amortization growth rates, such debt is less risky, Cowan said.

In general, as infrastructure projects largely seek to provide essential services, the risks are relatively low, Cowan said: “In terms of risks, there are probably fewer than you think.”

In assessing opportunities around the world, Cowan said India, Russia and South America all offer particularly high potential returns. Although North America’s infrastructure sector is still evolving relative to other parts of the world, it has high growth potential, added Cays.