Overview
As an asset, toll roads are associated with predictable cash flows and stable profitability. And as this case study explores, they also offer investors a potential hedge against inflation.
Indiana Toll Road (‘ITR’) is a 157-mile divided highway in the state of Indiana, which has been operational since 1956 and privately operated since 2006. Fund(s) advised by IFM first invested in the road’s operator – ITR Concession Company (ITRCC) – in May 2015.
Why did we invest in Indiana Toll Road?
From the outset, ITR represented a distinctive investment opportunity on a number of fronts. Above all, we felt this was an asset that resonated with our investment philosophy, providing the means to invest in what really matters:
An essential asset with a long operating history
The road serves as an important transportation link connecting Chicago – the freight hub of the US – to the East Coast and provides an essential service to its customers. The road has a long operating history, allowing the traffic profile to be well understood.
A potential hedge against inflation
ITR’s tolls can be increased in line with various economic indicators, including the consumer price index (CPI) and nominal GDP per capita. This offers some protection in a high-inflation or recessionary environment.
Long-life asset providing for long-term investment horizon
ITR benefits from a long-life concession agreement, providing for a long-term investment horizon and aligning with IFM’s investment philosophy.
Exposure to emerging trends
ITR is well placed to capitalize on emerging trends in logistics, such as evolving just-in-time supply chains.
Our active approach: What’s been the focus since 2015?
But while the opportunity might seem obvious, getting the most from any infrastructure investment requires significant know-how. In many ways, ITR exemplifies IFM’s approach to both active management and capital investment, serving all stakeholders.
Encouraging investment to create value
We take seriously our commitment to be a valued member of the communities we serve. This includes making significant investments to improve our assets for all stakeholders. In a decade of ownership by fund(s) advised by IFM (through 2025), ITR will have invested more than US$1 billion in road and bridge improvements, enhanced travel plazas, and improved safety for customers and employees, amongst other initiatives.
A partner to Indiana
In addition to investing in roadway improvements and customer experience initiatives, ITR has demonstrated its ability to act as a helpful partner to the State of Indiana. In 2018, ITR and the State of Indiana agreed to a concession amendment, whereby ITR would pay the state US$1 billion in exchange for a one-time toll increase for certain customers. These funds were deployed around the state to fund government initiatives, including the completion of major roadway projects.
The outcome
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From the acquisition by fund(s) advised by IFM through to 2025, over 90% of pavement lane miles and 40% of bridges on ITR will have been reconstructed
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Value has been provided to the residents of Indiana, and ITR, through the innovative 2018 concession amendment
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Improvement in safety performance since the acquisition by fund(s) advised by IFM, including zero employee lost-time injuries in 2021 and 2022
*Unless otherwise specified, all data included within this case study is sourced from IFM/Indian Toll Road.
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Case studies are provided for illustrative purposes only and should not be relied on to make an investment decision. This case study was chosen because it demonstrates IFM’s active approach to infrastructure investing. This material is provided for informational purposes only. This material does not constitute an offer, invitation, solicitation, or recommendation in relation to the subscription, purchase, or sale of securities in any jurisdiction and neither this material nor anything in it will form the basis of any contract or commitment. Past performance does not guarantee future results. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss of principal may occur. This material is confidential and should not be distributed or provided to any other person without the written consent of IFM Investors. IFM-14APR2025-4356006