EDHEC Business School has entered into a partnership with French bank Natixis for a second research chair on “Private Infrastructure Debt Benchmarks”. The research chair will run from 2016 to 2019.
This project follows the completion of a first Research Chair (2012-2015). Natixis brings its support to the creation and population of a global infrastructure debt cash flow database.
This database is being built by the EDHEC Infrastructure Investment Institute from lender contributions and primary documentation (financial statements, bond documentation etc), will cover thousands of investments globally, and will allow the production of infrastructure debt benchmarking studies.
Over the 2016-18 period, the Chair aims to produce three types of empirical benchmarking analyses of infrastructure debt:
• Infrastructure debt benchmarks in an asset allocation context (risk/return);
• Infrastructure debt in a liability-driven investment context (duration vs. performance);
• Infrastructure debt performance and the ESG characteristics of infrastructure projects.
The Research Chair was officially launched at the EDHECinfra Forum in London on 16 March 2016.
The first EDHEC/NATIXIS Research Chair 2012-2015 made a number of valuable contributions to infrastructure debt investment. The work of the Chair has also been instrumental in informing and educating investors about infrastructure project debt and its characteristics.
Regular and important contributions to the prudential regulatory debate, especially the adaptation of the Solvency-II framework to work towards a clearer definition of infrastructure investment and dedicated prudential treatment for infrastructure.
The Chair has also been involved in the policy-setting process in various fora, including at the G20 level and in regional fora such as the OECD, the EU and APEC. The Chair contributed directly to the definition of a data collection standard for asset pricing and the calibration of risk models, which is currently being discussed as an output of the G20 Investment and Infrastructure Working Group (IIWG) in 2015.
Finally, the Chair’s work led to significant applied research outputs including:
• the creation of important new empirical knowledge about construction risk, risk pricing and portfolio construction with infrastructure debt;
• the development of a dedicated asset pricing technology for project finance debt;
• the calibration of models of default frequency and correlation using new data collected by EDHEC and providing of the sole sources of empirical knowledge on these issues.
For over 20 years, Natixis has assisted its sponsor and investor clients in achieving their infrastructure financing objectives throughout the world. Over the years the team has advised on, arranged or financed more than 300 projects in 60 countries.