EDHECinfra Paper
Research for Institutional Money Management: Infrastructure Investing

This special issue of the June 2015 Pensions & Investment EDHEC-Risk Supplement includes a special focus on infrastructure investment research.

Our first article argues that a number of characteristics associated with the structuring of capital projects constitute a much more powerful framework to understand, benchmark and predict long-term returns in infrastructure debt or equity. Thus, infra- structure investment can be construed as a way to buy claims on future cash flows created by long-term contractual arrangements between parties. In numerous cases, infrastructure investors do not actually own any steel or concrete. When they do, the value of their investment is conditioned not by the tangible nature of the asset, but in a license to operate a natural but regulated monopoly.

In the area of infrastructure investment, having progressed towards clear definitions of underlying assets, and built robust, state-of-the-art pricing and risk models that avoid the pitfalls of existing practices and are designed to deliver the answers needed by investors, regulators and policy-makers, it is now time to collect the relevant information. Collecting this information requires large-scale cooperation between investors, creditors, academic researchers and the regulators that can help make such reporting part of a new standard approach to long-term investment in infrastructure by institutional players.

We discuss a dedicated valuation framework for privately-held infrastructure equity investments. Following the roadmap to create long-term infrastructure investment benchmarks that we had previously developed, this framework takes into account the challenges of valuing privately-held and seldom-traded infrastructure equity investments, while aiming to design a methodology that can be readily applied given the current state of empirical knowledge and, going forward, at a minimum cost in terms of data collection.

Pensions & Investment
2015 (January)
infraMetrics™ by EDHECinfra


  • The information contained on the EDHECinfra website (the “information”) has been prepared by EDHECinfra® solely for informational purposes, is not a recommendation to participate in any particular investment strategy and should not be considered as an investment advice or an offer to sell or buy certain securities.

    The rest of this disclaimer can be read on the legal page of this website.

    The terms contained in this Disclaimer are in addition to the Terms of Service for users without a subscription applicable to the EDHECinfra® website, which are incorporated herein by reference.

    This site uses cookies to deliver the services you request, improve user experience and measure audience. By continuing to browse our website, you are consenting to our use of cookies. Find out more about this in our Privacy policy.


  • X