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
P&I Supplement: Research for Institutional Money Management
This special issue first examines the use of data to produce a benchmark or comparable (‘comp’) of the climate risks of infrastructure companies, discussing EDHECinfra & Private Assets’ data that is both granular and robust.
It’s Getting Physical: Some investors in infrastructure could lose more than half of their portfolio to physical climate risks by 2050
We show that the physical risks created by climate change are not limited to a distant future for investors in infrastructure, some of whom could well lose more than 50% of the value of their portfolio to physical climate risk before 2050 in the event of runaway climate change.
Is Thames Water just a case of bad management?
Can you really lose GBP1.5Bn in a couple of quarters when investing in a water utility? Investments in infrastructure like water utilities are very often presented as ‘boring’, slow-moving, low-risk assets, that also happen to be cash cows. That latter point is true, as my colleagues have shown in previous research. The rest is wishful thinking at best, but mostly … Read More
IPE Supplement: EDHEC Research Insights
This infrastructure investment special issue first looks at the use of data to produce a benchmark or comparable (‘comp’) of the climate risks of infrastructure companies.