EDHECinfra in the news

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.

IP&E Real Assets: Is rolling stock infrastructure?

How many assets does an infrastructure portfolio need to be sufficiently diversified? Most institutional investors would say between 20 and 50, according to a recent survey by EDHECinfra and the Global Infrastructure Hub. But this is not enough according to Frédéric Blanc-Brude, the director of EDHECinfra, the organisation that has been striving over recent years to transform the way the asset class is measured and classified.

Speaking at the annual EDHECinfra Days Conference in London on Friday, Blanc-Brude wondered if those answering the survey were referring to “a vague memory from their MBA days” that owning 40 to 50 stocks ensured a portfolio was diversified. EDHECinfra research suggests it should be more in the region of “several hundreds of assets”, he said, while admitting “this is difficult to achieve”.

Read the article here.

Pensions & Investments: Indexes put bright light on unlisted assets

EDHEC Infrastructure Institute on June 7 launched global benchmark indexes for unlisted infrastructure equity and debt that market veterans say could pave the way for more efficient allocations to the fast-growing asset class.

The first performance data for unlisted infrastructure equity EDHECinfra released showed returns for the year through March 31, including leverage, of 11.6%, slipping from annualized three-year returns of 12.6% and five-year returns of 14.1%.

Read the article here.

 

Les Echos: Infrastructures – Why managers need not fear a bubble

Our recent paper on the factors that drive unlisted infrastructure equity valuations and recent market trends was highlighted in French Business Newspaper Les Echos, ahead of its key note presentation by Frederic Blanc-Brude at the Infrastructure Investor Global Summit in Berlin.

The paper shows that systematic risk factors explain asset prices well in unlisted infrastructure markets and that the evolution of prices has been ‘rational’ over the past 10 years. Infrastructure is expensive because it is a low risk asset.

The research paper also discusses the implications of its findings for asset pricing and fair value measurement.

Read the article in Les Echos here (in French).

FT: ESG has no financial benefit for infrastructure groups, study finds

The first ever study on ESG reporting and financial returns by Tim Whittaker and Silvia Garcia was highlighted by the Financial Times.

“This paper challenges the oft-reported notion that better ESG ratings should somehow systematically increase or decrease returns,” said Tim Whittaker, research director at Edhecinfra.

“The study examined 173 companies in Europe, the Americas, Australia and New Zealand that reported on areas including board gender diversity and energy efficiency between 2016 and 2018. Gresb assessed this against data on their returns tracked by Edhecinfra. The study is at odds with other research that shows that companies with better ESG credentials are stronger performers, based on the idea that issues such as poor governance and environmental problems damage profitability.”

Read the story in the FT here.

Infrastructure Investor: ‘Double-digit returns are behind us’

Infrastructure is a new asset class; numerous deals had to happen before buyers and sellers discovered a ‘fair price’.” “It is also important to note that valuations did not just increase rapidly due to a wall of cash chasing assets, but rather prices evolved to reflect the preferences of investors taking major risk factors into account.”

EDHECinfra’s research paper “Which Factors Explain Unlisted Infrastructure Asset Prices?” is discussed in Infrastructure Investor.

Read the full article here.

 

IP&E Real Assets: Can America build bridges (and roads)?

The bigger issue standing in the way of higher US infrastructure investment is the lack of homogeneity in financing and procurement across states. The US cannot be thought of as a single infrastructure market but rather 52 separate infrastructure markets.” For private investors to get comfortable with investing in US infrastructure, two things need to happen: investors must see a pipeline of investible infrastructure projects, and infrastructure projects and managers must improve the transparency in the reporting of performance and risk.

EDHECinfra’s Sarah Tame is interviewed by IPE Real Assets.

Read the full article here.

Infrastructure Investor: Why clearly defining infrastructure is critical

Without a proper taxonomy providing a set of criteria to define infrastructure it is hard for asset managers to structure the solutions investors need.

The EDHEC Infrastructure Institute, as part of its work to build performance benchmarks for investors in private infrastructure debt and equity, has launched the Global Infrastructure Company Classification (GICCS) to do just that.

EDHECinfra’s Sarah Tame argues that without a clear definition of what it is and what it can offer investors, the infrastructure sector does itself a disservice.

Read the full article here.

 

Building benchmarks for infrastructure investors

EDHECinfra has now built the largest database of infrastructure investment data in the world. The data has been used to create performance benchmarks that are needed for asset allocation, prudential regulation and the design of infrastructure investment solutions.

EDHECinfra’s Sarah Tame and Frederic Blanc-Brude write for Infrastructure Asia about the need for transparency and accurate performance measures within infrastructure investments.

Read the full article here.

 

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