We examine two issues relevant to diversification and infrastructure investment: portfolio construction and what it means to build a “well-diversified” portfolio of unlisted infrastructure equity; strategic asset allocation, examining the potential diversification benefits gained by adding infrastructure to the asset classes that make up a typical portfolio.
Low Tide: What the Data Showed About Thames Water
In this paper, we ask what investors in Thames Water – and its holding company Kemble Water – would have learned about the level of risk of their investment and its likely market value had they compared its characteristics to market and peer group data.
Computing Extreme Climate Value for Infrastructure Investments: Asset Pricing Applied to NGFS Phase 4 and Oxford Economics Scenarios
This paper describes the novel method that we have developed to measure climate risks. While we here apply this method to infrastructure assets, it paves the way to using similar approaches to enlarge the scope of its application.
Physical Climate Risk Survey: those in the infrastructure investment industry are concerned and lack data
Investors are concerned about physical climate risk and believe that they have almost no idea how it will affect unlisted infrastructure assets; that’s the clear message they delivered when we surveyed them on their views regarding the risks to the asset class.
Highway to Hell: Climate change will cost hundreds of billions to investors in infrastructure
This paper presents an assessment of transition and physical risks in the privately invested infrastructure sector. Leveraging the NGFS scenarios, we quantified the costs associated with delayed or uncoordinated transition and evaluated the potential portfolio value loss resulting from physical risks in the absence of climate action.
Risk Premia: Good times are over, now it gets harder
This is a grim headline, but with the economic shifts over the last two years, we might be seeing a more difficult market for infrastructure investment. From our perspective, we are observing some interesting shifts in the market. Firstly, despite the evidence that inflation may be cooling in major economies, there is evidence that interest rates might be higher for … Read More