Private Infrastructure Broad Market Equity Indices (Europe, 2000-2016)

This paper presents the first results of an ambitious applied research project to create and compute fully fledged private infrastructure equity investment benchmarks. The indices we created span 14 European countries over 16 years, going back to 2000. In this paper we focus on three questions:

1. How does a “broad market” index of private infrastructure equity investments perform relative to a public equity market reference index?

2. Is there a difference between the risk-adjusted performance of contracted, merchant, and regulated infrastructure, or between investing in “project finance” vehicles and “infrastructure corporates”?

3. How much diversification of investment specific risk can be achieved in portfolios of private infrastructure equity investments?

Benchmarking Infrastructure Project Finance: Objectives, Roadmap, and Recent Progress

In this paper, we describe the objectives, roadmap and recent progress of academic research with respect to benchmarking the financial performance of privately-held infrastructure debt or equity investment, with a focus on the recent development of a new framework to collect data and evaluate such assets.
To determine a way forward, we take the following approach: we start from the reasons why infrastructure investment benchmarks are in demand and list the key questions that such benchmarks should be expected to answer. Unfortunately, they remain very difficult to answer today, for lack of the relevant information.
Hence, we propose a roadmap to develop a definition, valuation, data collection and portfolio construction framework of privately-held infrastructure debt and equity cash flows designed to answer these important questions.

Towards better infrastructure investment products?

In this paper sponsored by the Global Infrastructure Hub (a G20 Initiative) EDHECinfra presents the result of the first in-depth survey of institutional investors’ perceptions and expectations of infrastructure investment, and asks what next generation of investment products can better answer the needs of long-term investors in infrastructure.

Revenue and dividend pay-outs in privately-held infrastructure investments: Evidence from 15 years of UK data

In this paper drawn from the EDHEC/Meridiam/Campbell Lutyens Research Chair, and using the largest database of infrastructure cash flows available for research, we compare the revenues, profits and dividend pay-out behaviour of infrastructure and non-infrastructure firms in the UK. The paper addresses two main questions: do infrastructure firms correspond to a different business model than other firms active in the economy? And do infrastructure firms exhibit a different equity pay-out behaviour than other firms?

The valuation of privately-held infrastructure equity investments

This paper contributes a rigorous valuation framework to the debate on the benchmarking of privately-held infrastructure equity investments. We aim to achieve the following objectives:

1. Determine the most appropriate valuation framework for privately-held equity investments in infrastructure projects or entities;
2. 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;
3. Derive some of the most relevant valuation and performance measures for long-term equity investors and regulators;
4. Define a parsimonious data collection template that nevertheless allows meeting the three points above.

Part of the EDHEC/Meridiam/Campbell Lutyens/ Research Chair 2013-2016

Measuring risk in unlisted infrastructure equity investment

In this paper, EDHECinfra proposes a methodology to measure the risk of unlisted infrastructure equity investments at the underlying level. This methodology relies on theoretical insights but is also designed to use standardised cash flow data, which either already is or could be collected in a systematic manner by investors in infrastructure equity and their managers.