Consider: the world's 20 largest now have nearly $130 billion under management, 77 percent of it raised in 2006 and 2007 and about 63 percent from new entrants. Taking into account leverage, a billion dollars of equity funding could, in some situations, pay for up to $10 billion in projects, according to McKinsey & Co., a global consulting firm.

The only question now is where will all the money go?

Governments around the world are increasingly comfortable using private money to finance such projects, while investors have poured large sums into specialist funds in hopes of obtaining attractive inflation-adjusted returns.

From 2006 to mid-2007, private investment funds raised $105 billion for infrastructure projects. All of this interest heightens competition and creates a problem for fund managers and investors seeking profitable infrastructure opportunities. The sheer volume of dollars now chasing deals is driving up prices, causing investors to either lose out to more audacious competitors or risk overpaying and achieving suboptimal returns.

McKinsey's experts contend that investors hoping to avoid these sky-high valuations can target more attractive deals if they are willing to look beyond existing infrastructure in developed economies and consider projects in emerging markets, complex brownfield deals and wholly private infrastructure opportunities, such as private industrial rail lines and power plants or the full privatization of infrastructure provider