Courtney Fingar: Joining up of FDI and real assets brings a multitude of opportunities

FDI real assets
Courtney Fingar

Foreign direct investment (FDI) is in a period of volatility and uncertainty, with the assumed post-pandemic recovery being jeopardised by threats of the economic, financial and geopolitical variety. But the FDI market is also entering into an exciting era of evolution and expansion.

As the government entities charged with attracting FDI, investment promotion agencies (IPAs) are increasingly being expected to widen their remits and engage institutional investors to drive investment in urban developments, infrastructure and real estate projects, logistics centres and other public schemes.

As I wrote in my inaugural column in the last edition of Real Asset IMPACT, FDI is evolving, and the strict focus on greenfield investment (defined as the setting up of on-the-ground facilities by a company in a country outside its home base, or the expansion of such an existing facility) as the ‘real’ and only relevant type of inward investment is rapidly becoming outdated.

FDI makes an impact

Slotted into this equation is the concept of impact investment, and here we are seeing a meeting of minds when it comes to the needs and expectations of public policymakers on the one hand and private sector investors on the other. Institutional investment – as much as any other form of investment – has an essential role to the play in global efforts to achieve the UN’s Sustainable Development Goals and to fulfil net-zero ambitions.

Given their role as the chief economic developers for their jurisdictions, it is very much within the interests of IPAs to get closer to institutional investors and work in partnership with them to ensure capital is flowing where it can have the most impact.

This is why the World Association of Investment Promotion Agencies (WAIPA) – the global voice for IPAs – is now offering training programmes on how to attract institutional capital and collaborate with financial investors. Ismail Ersahin, chief executive and executive director of WAIPA, discusses this and other IPA priorities in our interview opposite.

Global opportunities

Real Asset Media is at the forefront of covering the nexus between traditional FDI and investment in real assets. This dedicated section, focused on the latest trends in FDI and highlighting global opportunities for investment, will be the first in a continuing series.

Logistics is an area where there are incredibly clear links between classic FDI, infrastructure and real estate, and where demand is booming as a result of supply chain disruptions – this is why we are shining the spotlight on this sector on the following pages.

The joining up of FDI and real assets is the place where location-specific opportunities meet institutional investment, for the advancement of both economic and development goals, and investor returns.

Courtney Fingar is the founding partner of Fingar Direct Investment and a contributing editor to Real Asset Insight. She was editor-in-chief of Investment Monitor and also worked at the Financial Times’ fDi Intelligence.