An short piece on what covid-19 means for benchmarking infrastructure investments published in top1000funds.
“What can infrastructure investors do this year with benchmarks absolute returns benchmarks defined as the risk-free or inflation rate plus a spread or 400 or 500 basis points? Is everyone who invested in transport and probably any merchant asset going to underperform? Or is it not more relevant to ask how they are doing relative to the market given the investment choices they have made? With such bad benchmarks, it is not possible to tell who made the right choices and who didn’t.
The COVID-19 lockdowns did not change the risk profile of the infrastructure assets that investors hold today. They are the same infrastructure assets than the ones they held at the end of 2019. Their long-term value, business and financial risks are unchanged. Neither has their potential obsolescence in a lower carbon economy, or any long-term trends of the usefulness of certain types of infrastructures.”