EDHECinfra is an infrastructure investment index provider. find out more.

The most benchmarks for infrastructure investors.

Combining the detail and quality of individual company analysis with the power and robustness of modern financial theory to create a deep understanding of the drivers of risk and return in the unlisted infrastructure asset class.

New Position Paper

"Infrastructure investors should abandon absolute return benchmarks - Lessons from the Covid-19 lockdowns"
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Market Relative Benchmarks

Why absolute return benchmarks have stayed prevalent until now but can be replaced by improved access to data and advanced asset pricing.

Impact of Covid-19

With indices for each segment of the infrastructure sector the impact of Covid-19 on infrastructure becomes clearer and more nuanced. 

Peer group benchmarking

Peer groups of large investors have performed differently against the market before and after Covid-19. Which ones created alpha?

Q3 2020 Unlisted Infrastructure Index Release

Infra300tm Equity Index Performance (local currency returns)

This quarter 1-year 3-year 5-year 10-year Inception
Total Returns 1.84 -7.75 5.75 7.20 13.69 14.32
Excess Returns 1.85 -7.95 5.20 6.64 12.76 11.71
Volatility - - 10.58 9.95 12.50 11.85
Sharpe Ratio - - 0.49 0.67 1.02 0.99
Value-at-Risk - - 17.70 17.67 20.57 18.03

Q3 2020 Index Release Comment

Q3 2020 Index Release – Back in positive territory thanks to a strong cash yield. Roads are back in the black but airports struggle on. Contracted infrastructure continues to be a safe bet.

The unlisted infrastructure asset class is back to positive returns at the aggregate level, but only thanks to the strong cash yield of infrastructure companies.

The infra300 index which tracks a representative global sample of unlisted infrastructure equity investments worth approximately USD190bn, is up 1.84% on the quarter, after two negative quarters since the start of the year. On a year-on-year basis, the index is down -7.8%, including a -15.7% drop in capital return and 7.9% income return (cash yield).

At the sector level, performance is mixed. A value-weighted index of unlisted equity investments in the transport sector (TICCS®-IC60) registers total returns very close to zero on the quarter, thanks to positive returns in the road sector (2.38%) which have seen their revenue forecasts improve compared to Q2 and no increase in market risk premia. Airports continue to struggle with returns of -2.3% on the quarter, driven by higher risk premia and lower expected revenue. On a year-on-year basis, transport is down -16.66%, roads have total returns of -12.74%, and the airports report -19.01% total returns calculated in local currency.

Regulated utilities (TICCS®-IC80) also keep suffering with the corresponding EDHECinfra index showing -1.9% in Q3 2020 and -15.2% year-on-year. In contrast, contracted infrastructure (TICCS®-BR10) shows small but positive returns in Q3 and is down only -5.7% year-on-year due to an increase in risk premia but helped by lower interest rates and stable cash flows.

On a risk adjusted basis, the performance of contracted and regulated assets continues to be more appealing than merchant infrastructure (TICCS®-BR20) which has seen its Sharpe ratio halved since the start of the Covid-19 crisis.

Following the recent drawdowns in several sectors, the value-at-risk of the infra300 has been trending from 15% to more than 18% since Covid-19 started, but remains below the typical thresholds used in the Solvency frameworks.

Private Infrastructure debt indices are also published today. Thanks to lower spreads on infrastructure corporate debt at approx. 120bp down from 180bp two quarters ago, and flat project finance debt spreads (approx. 160bps), the broad market private infrastructure debt index continues to show stable albeit compressing returns, with 1.4% total return on the quarter and slightly more than 4% return year-on-year.

Download the index factsheet: USD returns | Local currency returns  

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Join us for a webinar on the impact of Covid-19 on unlisted infrastructure investment volatility on June 23rd at 10am GMT. Registrations here.

The infra300 is the new EDHECinfra flagship equity index and is available free of charge on the platform and through Bloomberg. Please note that from 2020-03-31 the EDHECinfra Broadmarket Indices (equity and debt) are only available to index data licence holders. For more information please contact sales@edhecinfra.com.

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Do infrastructure companies tend to pay higher dividends?

Rebecca Tan and Tim Whittaker explore the claim that infrastructure investments are different from other types of firms and examine whether infra businesses tend to pay larger and more frequent dividends

higher asset tangibility

Strong evidence for unlisted infrastructure firms having a higher intensity of Property, Plant and Equipment compared to non-infrastructure.

 lower operating leverage

Strong evidence for unlisted infrastructure’s operating leverage being lower than that for non-infrastructure.

significant dividend payouts

Strong evidence for infrastructure paying out more dividends as a proportion of their revenues compared to non-infrastructure.

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All 400+ index families available in the EDHECinfra platform are updated quarterly on the 10th day of the quarter.

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