CIR: The challenges of benchmarking infrastructure in a pension portfolio

Benchmarking is important because it’s the only way to understand infrastructure investment on a multi-asset class basis, says Frederic Blanc-Brude, chief executive officer at Scientific Infra and director of the EDHEC Infrastructure Institute. “Before knowing how well your asset managers perform or anything like this, the first other questions for a [chief investment officer] are, ‘Should I invest in infrastructure in the first place? What role does it play in my portfolio? What does it contribute? How different is it from bonds and stocks? Does it have a risk profile that is interesting for me?’” Read the article here. (America and Asia only)

The Banker: Assessing sustainable infrastructure: the bigger picture

“The infrastructure sectors and their related risks is a much more challenging task, according to Frédéric Blanc-Brude, director of the infrastructure institute at business school EDHEC,” writes Silvia Pavloni for The Banker. Read the story here.            

Institutional Investing in Infrastructure: A conversation with Frederic Blanc-Brude

i3 senior editor Drew Campbell recently spoke with Frederic Blanc-Brude, director of EDHEC Infrastructure Institute, about the state of benchmarks in infrastructure investing. Here are excerpts from their conversation.

Les Echos: La « smart infrastructure », clé de notre mutation économique

Pour Anne-Christine Champion (membre du Advisory Board EDHECinfra), responsable monde actifs réels chez Natixis, le secteur des infrastructures est un acteur indispensable dans l’accompagnement des mutations technologiques de notre économie. Anne-Christine Champion writes in Les Echos, “Le financement d’infrastructures a lui aussi l’opportunité de devenir plus « intelligent » et de bénéficier des progrès du traitement de la donnée. La recherche académique a, sur ce sujet, un rôle important à jouer. C’est l’objet notamment de notre collaboration avec EDHECinfra dans le cadre de notre chaire de recherche en infrastructures. Depuis son lancement en 2012, les équipes d’EDHECinfra collectent et analysent les données de performance de la dette infrastructure. Ce travail a notamment conduit à la création d’indices permettant d’analyser la performance de la classe d’actif. Le nouveau programme de recherche de 3 ans, annoncé le 7 octobre dernier, porte sur la mesure de l’impact environnemental et social des investissements en infrastructure. Il permettra d’enrichir les ensembles de données existants avec ceux issus de l’intelligence artificielle.” Read the full story here.

IP&E: Is infrastructure too expensive? In a word, no

Richard Lowe looks at the evidence available on the pricing of infrastructure assets. “Another interesting contention is that infrastructure was previously cheap and is now more fairly priced. EDHECinfra has argued that the past decade of price increases could be interpreted as “a normal process of price discovery” Read the article here.

Portfolio Institutionell: Eine Infrastruktur aus Aktien

Tim Büttner of Portfolio Institutionell takes a look at EDHECinfra’s research on listed infrastructure: „Diese sind jedoch recht rar und zudem in Zahl und Volumen rückläufig, da diese von der Börse genommen werden“, so Frédéric Blanc-Brude, Director des EDHEC Infrastructure Institute und Ko-Autor der Studie. Investoren empfiehlt EDHECInfra, von Anbietern Transparenz über die Portfoliozusammensetzung sowie das Benchmarken gegenüber privaten Infrastrukturindizes einzufordern, um zu gewährleisten, dass auch tatsächlich das gewünschte Risiko-Rendite- Profil und die angestrebte Diversifikation erreicht werden. Read the story (in German) here.    

IP&E Real Assets: Why big is often best

Christopher O’Dea explores the role of size and the lack of liquidity in infrastructure investing, drawing from EDHECinfra results.

IP&E Real Assets: Is infrastructure on the right track?

Richard Lowe reviews the state of the market and uses insights from EDHECinfra research.

IP&E Real Assets: As OTPP invests in SpaceX, should infra investors look beyond ‘grounded’ assets?

At the annual EDHECinfra Days Conference in London, Frédéric Blanc-Brude, director of EDHECinfra, suggested that rolling stock should be excluded from benchmarking classifications along with aircraft and ships, on the basis that infrastructure is assumed to “bolted to the ground”. But while that debate continues – The Infrastructure Company Classification Standard (TICCS) is still open to consultation – investors need to think about what including moveable assets would mean for investment in the asset class in future. It could mean a more diversified asset class that includes cycles, drones and scooters if demographics change drastically. Read the story here.

FTfm: Infra funds can no longer play the arbitrage game

EDHECinfra’s data collection and standardisation work was mentioned in John Dizard’s column: “The real threat to margins in the infra fund industry is transparency and liquidity. For example, Edhec’s Infrastructure Institute has been compiling a global database and valuation metrics for about 6,000 unlisted (and potentially investible) infrastructure assets. Edhec created a classification system for the assets, based on metrics such as whether the assets have contracted revenues, regulated rates of return or are subject to merchant risk.” Read the article here.

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