You’ll get it at every conference: infrastructure is a long-term, defensive, low-risk asset class, offering inflation protection, steady yield and little-to-no correlation with the wider market.

But what if that picture is wrong?

In a new paper – Beyond the Illusion of Stability: The Case for Valuation Discipline in Private Markets – Tim Whittaker, director of the EDHEC Infrastructure & Private Assets Research Institute (EIPA), argues that infrequent and smoothed valuations are lulling investors into a false sense of security.

As the paper puts it, valuations smoothing doesn’t reduce risk – it actually ends up concentrating it and delaying it. That is especially problematic now that private markets are a multi-trillion-dollar behemoth, potentially creating systemic risk.

The solution – enforced by regulators – is a shift among private market actors that emphasises more frequent valuations that are robust, grounded in better data and independently monitored. And that might ultimately lead investors to realise that private assets are not inherently more stable than public ones.