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Insights

Opinion pieces from the team, and uses cases covering private markets, infrastructure investment, climate change, social risk, and more.

FT: Is the return profile of infra funds too good to be true?

This article was first published in the Financial Times in April 2021. Unbelievably Smooth If one examines the annual reports of many unlisted infrastructure equity funds a surprising pattern appears: given the level of returns reported, the risk implied by the volatility of the valuations is surprisingly low, as shown in table 1. For that level of volatility, over a

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Bloomberg: Hurdles not set in the interest of investors in funds

This article was originally published by Bloomberg in April 2021. The Bottleneck Fund raising by infrastructure fund managers is at an all-time high but so is the amount of funds raised that has not been invested. The amount of so-called ‘dry powder’ has been multiplied by three in ten years and now stands at more than USD200bn. While infrastructure investment

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Wall Street Journal: The Price of Inertia

High hurdle rates are not in the interest of investors in infrastructure funds. This articles was first published in the Wall Street Journal in April 2021. Fund-raising by infrastructure fund managers is at an all-time high, but so is the amount of funds raised that has not been invested. The amount of so-called ‘dry powder’ has trebled in 10 years

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FT: Ignorance is not bliss: can investors ignore losses in airports?

The risk of default in airports has increased, as has the risk of bankruptcy. This piece was originally published in the Financial Times and the Wall Street Journal in April 2021. Can Covid Impact Long Term Investments? The impact of COVID-19 lockdowns on the airport sector highlights a dilemma about how investors approach the valuation of private, illiquid infrastructure assets:

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FT: How exposed are infrastructure investors to inflation risk

The sensitivity of the value of unlisted infrastructure equity investments to changes in the discount rate is about 10% on average. This article was originally published in the Financial Times in April 2021. A Partial Inflation Hedge A return of inflation could unveil a significant risk exposure for investors in infrastructure. This asset class is often presented as an inflation

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The Fair Value of Investments in Unlisted Infrastructure equity: The robustness of better data & advanced methods

As more investors consider allocations to unlisted infrastructure, the need to bring the asset class into the mainstream of risk management, asset allocation and prudential regulation is increasing rapidly. Recent advances in data collection and asset pricing techniques now enable the evolution of fair market prices to be estimated.