RIN II •094 Alpha Group Capital LLC
Financially strained public sector increasingly turning to the private sector
The Portfolio Advisor intends to capitalize on increasing private sector equity investment through Sponsors in infrastructure
as they seek to acquire private and public sector infrastructure assets. Public finances are strained and are expected to
remain under pressure over the coming decade in most U.S. states due to demographics, declining tax revenues, and
increasing demand for social expenditures. As of October 2016, state governments faced a combined $5.6 trillion in
unfunded liabilities'', as illustrated in Exhibit 3 below.
Consequently, the public sector is increasingly seeking to transfer the costs and benefits of infrastructure ownership to
the private sector. Privatization is a means of monetizing the value of an asset, thereby generating proceeds that can
be used to finance ongoing spending needs and reduce budget deficits. Privatization is gaining momentum in the
United States, with 37 U.S. states passing or pursuing some form of privatization-enabling legislation in the past few
years. 12
Exhibit 3: Unfunded Liabilities by US State ($bn)
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11 Source: American Legislative Exchange Council. October 2016. Data is based on State Budget Solutions' calculations.
12 Source: The Trump Agenda: Dawn of a New infrastructure Era?' by Goldman Sachs, 2017.
Confidential 12 February 2018
CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0088689
CONFIDENTIAL SDNY_GM_00234873
EFTA01386819