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.
Infrastructure Strategy 2022: A Pivot to the Digital Frontier
This report is the first in a series of annual publications by BCG and EDHECinfra exploring the state of infrastructure investment globally. “Infrastructure Strategy 2022” provides a new perspective on the investment styles and risk-adjusted performance of different groups of infrastructure investors.
Robust benchmarks for investors in private infrastructure funds
The infraMetrics fund strategy analyser allows benchmarking the gross and net performance of unlisted infrastructure funds using robust IRR and multiple quartiles that are not biased or skewed by the limitation of manager contributed data.
The Volatility of Unlisted Infrastructure Investments: Valuation drivers and trends, 2000-2021
In this paper, we examine the drivers of the volatility of unlisted infrastructure equity investments. Our analysis uses the EDHECinfra database of unlisted infrastructure equity investment data, which covers hundreds of firms over 20 years and a new approach to measure the market value of these investments over time.
The choice of performance test benchmark of Superannuation funds’ investments in infrastructure
In this contribution to the exposure draft consultation on the “Your Future, Your Super” package, we do not comment on the general approach taken by the regulator to benchmark MySuper products but solely focus on the choice of benchmark for the unlisted infrastructure asset class. We propose abandoning the use of listed equity indices to proxy investments made in the unlisted infrastructure equity asset class in the proposed performance tests of MySuper products. We argue that recent advances in data collection and innovation in asset pricing provide a robust and academically validated alternative to the currently proposed benchmark. This listed equity index (the FTSE Developed Core Index) is wholly inadequate because it is not representative of the universe or of the risks to which Superannuation products are exposed when investing in unlisted infrastructure. Instead, the infra300, an index built to be representative of the unlisted infrastructure universe, constitutes a robust and fair alternative that can benefit plan members and managers alike as well as meeting the prudential objectives of the regulator.
Strategic Asset Allocation with Unlisted Infrastructure: Better data for sensible results
We show how the traditional indexes used as proxies for unlisted infrastructure fail to represent the qualities of the asset class and how investors can carry out a simple asset allocation exercise to calculate the optimal allocation they should be making to unlisted infrastructure based on their individual portfolio needs.