A demand for infrastructure development concurrent with federal deficits and budget shortfalls faced by the government has encouraged private participation in infrastructure projects. This has caused infrastructure funds to evolve. Infrastructure funds allow investors to gain access to the underlying characteristics of the portfolio of infrastructure assets. These funds have seen a growth in investment through unlisted and listed equity and are attracting investors because of their stable, long-term nature and relatively strong yields. Pension funds have also invested in the infrastructure sector for portfolio diversification and risk mitigation. The investors can not only reduce risk by investing in a portfolio of infrastructure entities with a negative or relatively low correlation between them, but also by investing in the equity market of other sectors. A low correlation between infrastructure and other sectors has enticed the risk-averse managers to invest in infrastructure funds. This paper discusses various cash inflow channels that support infrastructure growth and the reasons for the exponential growth in infrastructure funds. Various barriers and regulations that discourage investment in infrastructure assets are also highlighted.