We examine two issues relevant to diversification and infrastructure investment: portfolio construction and what it means to build a “well-diversified” portfolio of unlisted infrastructure equity; strategic asset allocation, examining the potential diversification benefits gained by adding infrastructure to the asset classes that make up a typical portfolio.

The BCG-EDHECinfra study of the risks facing infrastructure investors and the returns that their investments generated found that asset owners did better than asset managers in 2022. The study also found that success in the current environment requires fresh approaches to investing and value creation.

This report, produced in collaboration with Ares Asset Management, illustrates that private infrastructure assets can provide resilience in the current rising rate and high inflation macroeconomic environment. The primary structural reason for this resilience is the ability of private infrastructure assets to increase revenues along with inflation. 

In this paper, we compare the behaviour of unlisted infrastructure equity investments with that of traditional assets, with a focus on the effects of shocks such as recessions, financial market crises and policy shocks. These findings have risk management and prudential implications.