Thought Leadership article in the new issue of IPE Real Assets, by Frederic Blanc-Brude.
“New asset valuation technology and data opens an era of transparency and better risk management for investors in infrastructure.
Assuming a post-Covid recovery of air traffic levels, investing in airports today could be a very good idea. But only at the right price. Indeed, the market value of an airport today must reflect both its future expected cash flows, which may well remain largely intact over the next few decades, and a risk premium that has increased by 300 basis points on average as of Q4 2020*, to reflect the heightened uncertainty with which these
cash flows may be paid since the start of the pandemic. This is simple maths: airports must be cheaper now than they were a year ago.
The market price of risk matters…”
Read the full article here.