John Dizard explores recent trends in infrastructure investments and mentions our results when it comes to performance and risk for investors in unlisted infrastructure equity:
Essentially, infrastructure investments are priced somewhere between the yield of a long duration bond and an energy equity. Using Edhec’s data to generate an infrastructure index, the “bond” has a duration of about 16 years, and a “coupon” or long-term cash yield that fluctuates between 5.5 per cent and 7 per cent.
As Blanc-Brude said: “Infrastructure has become ‘expensive’ compared to its long-term levels, but it has a great cash yield. So it still makes sense. Even so, it is exposed to risk, especially interest rate risk. Investors should be aware of that.”
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