Insights

CAPM may be ‘one of the founding frameworks of modern finance’, but for determining the net asset value of unlisted infrastructure it is terribly inadequate. Frédéric Blanc-Brude, the director of the EDHEC Infrastructure Institute explains why and offers an alternative. Originally published in Infrastructure Investor. When reporting the NAV of unlisted assets like infrastructure using discounted cashflows, best practice consists

This paper addresses the problem of mapping the infrastructure asset class to the activities of the EU Taxonomy. This mapping process not only tackles a crucial hurdle but also contributes to a deeper understanding of how green taxonomies can be effectively applied to the infrastructure asset class.

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.

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.

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.

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.