Sovereign Wealth Funds Are Buying America's Plumbing (And We're Letting Them)
You should be following their lead.
Dear Fellow Traveler,
The Fed plays with interest rates like a toddler with a light switch.
Meanwhile, sovereign wealth funds from the Middle East have quietly bought up the pipes, ports, and power lines that keep America running.
They're doing it with a $1.4 trillion checkbook and a smile...
A pipeline in Texas isn't just moving oil anymore.
It's printing money for Abu Dhabi.
A data center humming away in Virginia?
It's generating returns for Qatari royalty.
Think about the warehouses keeping Amazon packages…
Norway's oil fund wants a piece of that action.
There’s just more and more foreign money coming into American infrastructure.
And it won’t slow down.
The UAE just announced a 10-year, $1.4 trillion investment framework.
That's trillion with a T.
Qatar has $500 billion and is shopping for American energy infrastructure like it's Black Friday at Best Buy.
You need to follow this money… and follow this strategy…
Boring Assets Are Suddenly Sexy
A toll road doesn't need to "disrupt" anything.
It just sits there, collecting fees from every car that passes.
People need to get to work, rain or shine, boom or bust.
That's what we call "contracted income."
For sovereign funds thinking in decades (not quarters), it's pure gold.
Remember our friend, and star of the monetary system - The Money Printer?
These infrastructure contracts come with built-in inflation adjustments.
As the CPI goes up and currency debasement increases, so do the fees.
It's like owning a business that automatically gives itself a yearly raise...
And unlike tech companies that need constant updates to stay relevant (cough… cough… Meta), infrastructure is wonderfully low-maintenance.
Build a pipeline. It won't need an AI upgrade next year.
The capital goes in upfront, and then it just prints.
Writing Checks Your Grandkids Will Cash
The UAE isn't messing around.
Through ADQ and ADNOC's XRG, they're deploying enough capital to make Elon Musk jealous.
We'rLNG terminals in Texas, energy data centers, and the whole nine yards. This isn't an investment.
It's colonization with a dividend yield.
Qatar is flush with LNG cash and looking to park it somewhere stable. With $500 billion burning a hole in its sovereign pocket, it's targeting energy infrastructure like it's 2008, and it's JPMorgan buying distressed assets.
Norway's taking a different approach.
Instead of flashy energy plays, they buy boring stuff. Think warehouses and logistics centers. This infrastructure that makes your two-day shipping possible.
They’re Smart Vikings.
Even America's funds are getting in on the action.
This isn't just about returns. When you own the infrastructure, you own leverage.
We've created a situation where foreign governments have a permanent seat at America's economic table, and they didn't even have to run for office.
These funds also bet on the energy transition.
They're not buying yesterday's infrastructure. They're positioning for tomorrow's hydrogen corridors and carbon capture networks.
We're selling the store to fund today's spending while creating tomorrow's dependencies.
Sure, capital injection will help our aging infrastructure. Yes, these funds bring professional management. But we're also handing over control of critical assets to entities whose interests might not align with ours.
The money printer created this situation.
Years of cheap money and inflation have made hard assets irresistible to global capital.
With their infinite time horizons and inflation fears, sovereign funds happily trade their petrodollars for pieces of American bedrock.
We're witnessing the biggest transfer of infrastructure ownership in American history, and most people don't even know it's happening.
Is it sustainable?
Ask me in 20 years when your utility bill goes to Riyadh.
What You Should Do
Stop turning your focus to 60/40 on stocks and bonds.
Look for infrastructure plays that the sovereign funds haven't grabbed yet.
MLPs, utility stocks with strong dividend growth, toll road operators, and pipeline companies.
Consider infrastructure ETFs for diversified exposure. And if you're feeling ambitious?
Look at REITs that own cell towers, data centers, and logistics facilities.
These are the backbone of the digital economy, and even sovereign funds can't buy them fast enough.
More to come…
Stay positive,
Garrett Baldwin
Agree with everything you say but looking for specific companies and/or funds to put my funds. Do you have a list of specific companies/funds to consider?
Devil's advocate here. This buying America's infrastructure approach would be disrupted if the AI boom is as successful in reducing knowledge workers (and then robots reducing skilled labor workers) as its advocates state (and apparently corporations are counting on for the next quantum leap in productivity that justifies stock prices). Musk and Altman regularly discuss universal basic income and then when that looks too grim offer universal high income. You can also see this less publicly discussed by Google, Microsoft, Meta, and Amazon CEOs which started with not hiring replacements but is now moving to huge workforce cuts to " focus more financial resources on winning the AI race". It’s even being discussed on the Daily Show and Reddit so not exactly a fringe view anymore that AI may be highly disruptive to work force and the infrastructure that we might have thought was "forever" (e.g., parking in Chicago, toll roads, etc.). So yes to energy in theory but even there, co-located nuclear reactors might bypass pipelines and utilities?
Of course this begs the question of who will be buying anything if large fractions of the work force are displaced?