A group of investors and asset consultants, sitting on a panel at an InAssociation infrastructure conference in Sydney on Wednesday, was asked to make a call on the future of the investment bank specialist funds model. They agreed it was over.The infrastructure investment director for Super Investment Management, Richard Roberts, said: "No one is investing in the highly geared, diverse funds that investment banks are putting together. "We would rather invest in projects directly. I am prepared to call an end to the model."All the members of the panel agreed that the inflated pricing and volatile trading of the funds offered by groups such as Macquarie Group, Babcock & Brown, Allco Finance Group and Challenger made them unattractive. They said they would prefer to invest offshore or bid for assets directly, rather than invest in the offerings of these groups.Roland Winn, the head of research at the wholesale infrastructure investment manager CP2, said: "Under the original model Macquarie or Babcock would come to you with an asset and ask for funding. You had some certainty about the asset and the way the fund would be structured."Then we moved to the black box approach, where we were asked to put money into a fund without any certainty about how it would be invested. Last year we counted $50 billion of such capital raisings globally. All that money is out there now bidding up infrastructure asset prices."Roberts said it wasn't just the investment banks stripping the returns out of assets. "When governments are involved in deals you can be sure they will have stripped away the downside protection and squeezed the lemon on the upside."The investment director for infrastructure at Industry Funds Management, Michael Hanna, said his group also preferred to invest direct rather than through funds. IFM has a $3 billion Australian infrastructure fund and a $3.8 billion global infrastructure fund.Hanna said he had not invested in an Australian infrastructure asset for three years. All of the group's infrastructure allocation has gone offshore in that time."Australia is a mature market. It has been really picked over. We are putting money into things like hydro projects in Brazil and Chile. It doesn't help that government here has set such a modest target for alternative energy."The explosion of funds has meant that assets in the local market get bid up to crazy multiples. We did bid on Alinta and Hobart Airport but we always get bid out of the market. "What these funds have done, because they are in there for the short term, is factor all the upside into the pricing. There is no refinancing upside anymore, the CPI projections are always high, margin improvement is priced in. These guys never look at the downside."On top you have high gearing, contrived dividends and impregnable management contracts. That seemed to be OK when these funds were market darlings but now sentiment has changed."Watson Wyatt consultant Sandi Orleow said: "We don't see a case for allocating any of our client's money to the listed