Insights

Investors have been at pains to benchmark unlisted infrastructure investments. However, using better data is now possible. This article was originally published in the Financial Times in April 2021. Policy Makers still Await Infrastructure Investors Infrastructure investment is at the heart of many governments’ post-Covid recovery plans, including a green new deal in the US, UK or EU. All such

A quarter of rising interest rates highlights the role of duration in infrastructure investments.   After a year which tested the resilience of infrastructure investments and their sensitivity to lower dividends in the transport sector because of Covid-19 lock-downs and a higher equity risk premium across all sectors, Q1 2021 is a reminder of the role of interest rate risk

The Q1 2021 release of the EDHECinfra indices incorporates the views and asset-level revenue forecasts of our team of financial analysts. This report updates the Q4 2020 report and is presented following the TICCS® taxonomy of infrastructure companies. Each quarter, the team reviews the revenue forecasts of 650 companies that are currently live in the EDHECinfra universe, based on the latest

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.

New Data Highlights the Role of Infrastructure in Multi-Asset Portfolios Latest benchmark data shows that unlisted infrastructure equity and debt could play a significant role in institutional portfolios with as much as 10% of the global portfolio. A new EDHECinfra paper entitled “Strategic Asset Allocation with Unlisted Infrastructure – Better Data for Sensible Results” shows the importance of benchmark selection

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.