This special private assets investment edition of the EDHEC Infrastructure & Private Assets Research Institute supplement to Pensions & Investments aims to share with institutional investors the latest findings from our research team as we focus a rigorous, academic lens on some of the most urgent and complex challenges shaping their investment landscape today.

Our first article is based on a global survey and exposes widespread inconsistencies and conservatism in how institutional investors value unlisted infrastructure assets; most report exit prices well above internal valuations. It highlights governance gaps and methodological fragmentation, and proposes reforms to improve transparency, comparability and alignment with market realities. We make recommendations for reforms to improve accuracy, comparability and investor confidence.

Our second article introduces a dynamic factor model for valuing private companies using actual transaction data, avoiding the biases of appraisals and traditional comparables. By leveraging the PECCS® taxonomy and a global dataset, it enables more accurate, frequent and transparent valuations, aligning with fair value standards and improving benchmarking in private markets. Our model enables the creation of reliable benchmarks, supports high-frequency portfolio valuations and aligns with international accounting standards. It enhances transparency, regulatory compliance and investment decision-making.

Next, we take a dive into market risk in private equities. In this article, we demonstrate how private equity asset prices are systematically influenced by firm-level risk factors such as size, leverage, profitability and maturity, as well as market segment classifications defined by PECCS®. Using transaction-level data and a multi-factor model, we show that over two-thirds of price variation can be explained by systematic risks, with valuation multiples and discount rates reflecting these exposures. The findings challenge the notion that private equity risk is unobservable and offer a more accurate framework for valuation, benchmarking and understanding market dynamics in private assets.

Finally, we take a look at the influences of fund size on performance. Our study finds that both small and mega US buyout funds outperform mid-sized peers, with small funds offering the highest alpha but also the greatest return dispersion and risk. Manager incentives and systematic risk exposures help explain these patterns, as successful managers scale into mega funds while smaller funds exploit inefficiencies in the lower end of the market. The findings suggest that alpha generation is possible at both ends of the size spectrum, though driven by different dynamics.