In this article, Noël Amenc, Associate Professor, EDHEC Business School & Director, Scientific Infra, and Frédéric Blanc-Brude, Director, EDHEC Infrastructure Institute & CEO, Scientific Infra, analyse the current market and the denominator effect that most investors face today.

“As a result of the denominator effect, many pension plans are pacing their commitments to private asset managers, preferring to stick with existing ones, even stopping investing if statutory caps on alternatives are reached.”

The authors ask why suffer at the hands of the denominator effect when the true market value of private assets is available, summarizing that today, thanks to advances in private-asset data and valuation technology, risk managers and asset managers do not have to struggle with the denominator effect .

Read the full story here.