EDHECinfra Index Methodology
EDHECinfra indices and benchmarks aim to provide the representative, risk-adjusted performance of investments in unlisted infrastructure equity and private debt.
EDHECinfra produces calculated (as opposed to contributed) indices: our data and technology allows re-pricing hundreds of individual assets through time, using actual transaction prices to recalibrate expected returns (and discount rates).
This approach uses market inputs, thus avoiding the smoothing of returns caused by appraisal valuations and providing a genuine fair value assessment of performance.
Unlike other private indices, which only report an average performance, EDHECinfra indices include the effect of diversification and provide advanced risk metrics such as volatility, value-at-risk and risk factor prices. The index calculation method is summarised below in four key steps.
A Global Infrastructure Data Collection Standard
The EDHECinfra Global Infrastructure Investment Data Standard is part of EDHECinfra's effort to standardise performance reporting for the infrastructure asset class.
The standardisation of the data collection allows comparing the performance of unlisted infrastructure investments with other asset classes more transparently. The increases transparency created by this Data Standard supports the development of the infrastructure asset class.
For this purpose, the Global Data Standard identifies information that is:
- reasonably available in a standardised format;
- a subset of all the available information investors have access to; and,
- focused on the most systematic aspects of private infrastructure companies' performance i.e. it is not overly specific to different types of infrastructure.
Using this approach, EDHECinfra has now created the largest database of infrastructure investment data in the world, tracking hundreds of firms (the Sampled Universe) over the past 20 years. This project was undertaken in coordination and collaboration with the industry.
Data was also submitted by banks, asset owners and managers. This collaboration is a sign that the private infrastructure industry is growing towards a more mature and transparent stage in its development.
Download the data standard here.