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White Paper

Towards efficient benchmarks for infrastructure equity investments

Company: EDHEC-Risk Institute

EDHEC-Risk Institute case study

Category: Commodities

Published: 29 January 2013

Format:

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Overview

This white paper follows three directions concurrently. First, by helping the investment management industry to better appreciate the financial economics and investment characteristics of underlying infrastructure investments, be they standalone projects or integrated utilities.

Second, in the context of the regulatory changes affecting long-term investors, theoretical insights are provided. These are designed to allow for finer risk assessment and valuation of infrastructure equity. The objective is to assist institutional investors in the design, calibration and update of internal models that adequately account for the specificities of equity infrastructure investment when determining risk-based solvency and capital requirements.

Finally, under discussion are the bases for a cash flow-reporting standard with the industry and engage in a wide-ranging effort to collect new data from investors in infrastructure equity, and work towards the development of meaningful and useful performance and risk benchmarks.

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