equity in emerging nations, with their ongoing need for infrastructure. Some of the most exciting development opportunities are shifting from India and China, which have attracted considerable private-equity dollars in the past, to Latin America and the Middle East.

Investment in private-equity infrastructure may be the best approach. For example, investors can buy into a Brazilian company building a private toll road. While a municipal bond that finances the deal will pay a potentially reliable but modest fixed yield for the duration of the bond term, a private-equity stake confers on the investor part ownership of the road. This offers a chance for steady income from tolls for the investor who owns a stake, as well as additional revenue if the road is sold back to the municipality.

Infrastructure investments are as diverse as investors' interests: building a bridge, erecting a power plant or revamping an existing one — even owning ships and ports to capitalize on ever-growing international trade.

Buying infrastructure
Private-equity opportunities require considerably more patience than many other types of investments, and they are far less liquid. A construction project may take years to complete and may involve complex engineering hurdles and government regulations. Yet it may, over time, deliver a substantial and steady income stream and protect against future inflationary periods.

Depending on their goals, investors can either participate directly in a single private-equity opportunity or choose a private-equity fund or even a fund of funds. Investing in a single private-equity opportunity may offer the highest potential returns. A fund or fund of funds, on the other hand, allows investors to capture some of the income and inflation advantages of private equity while reducing risk through diversification.

Buying a limited partnership in a firm producing natural resources —  such as timber, for example — enables an investor to tap into long-term, inflation-beating income streams. Timber is a low-maintenance product, and the prices of wood products tend to rise with inflation. So investing in timber has the potential to offer solid, long-term returns. And unlike a firm's general partner or partners, who manage the company, limited partners take no active role in operations, and their liability for the firm's debt is generally limited to the extent of their registered investment. Other limited partnerships offer royalty rights on natural gas or mining, with returns based on the quantity of gas or metal produced and the rising price of those products.