by Frédéric Blanc-Brude
Western politicians now routinely demand that more pension fund money be invested in infrastructure, in a effort to support the economy, and because it is supposed to match their long-term investment needs as well. However, the net effect of investing in infrastructure assets for an institutional investor like a pension fund remains largely unknown. Does infrastructure hedge the opportunity set or expand it? Does it improve the returns of the efficient portfolio for a given level of risk? If infrastructure is an alternative investment, what is it an alternative to?
Strategic asset allocation to infrastructure: from asset class to active strategy (Frédéric Blanc-Brude), In InfraNews, 2012.