Infrastructure
KPMG’s Report Cards on Real Assets
Jan 23rd, 2018 | Filed under: Infrastructure, Institutional Asset Management, Institutional Investing, Liquid and Fixed Income Real Estate, Natural Resources and Land, Newly Added, Operationally Intensive Real Assets, Real Assets, Real Estate, Real Estate Equity InvestmentsKPMG has posted a new paper looking at the role of real assets (defined as “anything where there is a tangible/physical asset being traded”) within a portfolio, with a focus on opportunities for U.K. based institutional investors, especially pension schemes. It begins with a brief survey of the field. RealRead More
Searching for the Right Infrastructure Manager: 3 Case Studies
Jan 14th, 2018 | Filed under: Allocating to A.I., Infrastructure, Institutional Asset Management, Institutional Investing, Newly Added, Operationally Intensive Real Assets, Real AssetsA new paper from bfinance (an independent financial services consultancy headquartered in London) discusses the “dramatically different era” into which infrastructure investing has entered over the last two years. The paper, “DNA of a Manager Search: Infrastructure,” looks at three recent unlisted infrastructure searches, in order to glean some insightRead More
Real Estate: A Global Outlook
Jul 13th, 2017 | Filed under: Infrastructure, Newly Added, Operationally Intensive Real Assets, Real AssetsPWC and the Urban Land Institute have jointly issued a report on “emerging trends in real estate” around the globe, which stresses that real estate’s attraction as an investment, even as a cross-border investment, has held up notwithstanding unprecedented levels of concern about geopolitics. The “global drift back to domesticRead More
Citi GPS on the Infrastructure as Asset Class
Mar 19th, 2017 | Filed under: Infrastructure, Newly Added, Operationally Intensive Real AssetsCiti Global Perspectives and Solutions (Citi GPS) has published a new white paper on the global need for infrastructure spending. The authors are: Jason Channell, head of EMEA Infrastructure Research; Elizabeth Curmi, Global Thematic Analyst; and David Lubin, head of Emerging Markets Economics. Channell et al contend that “now couldRead More
SWFs Looking to PEs Both as Intermediaries and as Co-investors
Feb 2nd, 2017 | Filed under: Infrastructure, Natural Resources and Land, Newly Added, Operationally Intensive Real Assets, Real AssetsA recent working paper from the European Corporate Governance Institute discusses direct investment by sovereign wealth funds in private equity transactions – that is, it discusses an ongoing shift from investing in PE funds to co-investing with PE funds. The paper describes this as a trend especially viable in theRead More
Infrastructure Project Finance: Benchmarking and Definitions
Nov 22nd, 2016 | Filed under: Infrastructure, Newly Added, Operationally Intensive Real Assets, Real AssetsIn a new article in The Journal of Alternative Investments, three EDHEC-affiliated scholars, led by Frédéric Blanc-Brude, the director of the EDHEC Infrastructure, Singapore, look at recent improvements in the understanding of the financial performance of privately held infrastructure investments, debt or equity, with respect to benchmarking thereof. They concludeRead More
Dakota Access and the Army Corps of Engineers: An Odd Mistake?
Nov 13th, 2016 | Filed under: Commodities, Commodities, Commodities: Examples, Infrastructure, Newly Added, oil, Operationally Intensive Real AssetsOn November 7, the U.S. Army Corps of Engineers put out a statement that said that the Dakota Access Pipeline (DAPL) had agreed to halt its controversial ongoing construction in North Dakota. The following day, which happens to have been Election Day, [so non-election news went largely uncovered], the ownersRead More
McKinsey: Historically Anomalous Period Nears an End
Nov 6th, 2016 | Filed under: Alternative Investments in Context, Infrastructure, Newly Added, Operationally Intensive Real Assets, Real Assets, The A.I. IndustryMcKinsey & Co. has posted a new report assessing the state and the future of the North American asset management industry, encompassing both active and passive managers and looking at five mega-trends. Skipping to the chase, the trends are these: The end of an anomalous eta of “exceptional investment returns.”Read More
Saving the World: One EM City at a Time
Oct 10th, 2016 | Filed under: Infrastructure, Newly Added, Operationally Intensive Real AssetsThe Global Commission on the Economy and Climate has issued a new report urging governments and major financial institutions to “scale up and shift investment to sustainable infrastructure as a fundamental strategy….” The report, The Sustainable Infrastructure Imperative, has no force as law or policy anywhere, but it may signalRead More
Private Capital Fundraising Slows: Green and Brown Valleys
Jul 14th, 2016 | Filed under: Farmland, Infrastructure, Natural Resources and Land, Newly Added, Operationally Intensive Real Assets, Other Topics in A.I., Real Assets, Real Estate, Real Estate Equity InvestmentsPreqin, the multinational data and consulting firm, has looked at the second quarter and found it was, for private capital fundraising … slow. So was the quarter before it. Together they made up the first half of 2016, in which the funds closed in the world of private capital globallyRead More
Infrastructure: Look at the Contracts–Not the Industry or the Index
Jul 10th, 2016 | Filed under: CAPM / Alpha Theory, Finance & Economics, Financial Economics Theory, Infrastructure, Newly Added, Operationally Intensive Real Assets, Real AssetsA new paper from EDHEC Infrastructure Institute decides that there is no such thing as a listed infrastructure asset class. What is the practical significance of that inference? It means that for investors (individual or institutional) looking to diversify their portfolio properly, a dedicated index focused on a listed infrastructureRead More
Welcome to Low-Return World: Will Chief Investment Officers and Trustees be ready?
Jun 22nd, 2016 | Filed under: Infrastructure, Institutional Asset Management, Institutional Investing, Newly Added, Operationally Intensive Real AssetsBy Charles Skorina For executive recruiters like us, that’s a question we’ll have to wrestle with as we present candidates to the boards of institutional asset managers. Two of our investment-management village elders–Bill Gross and Burton Malkiel–say we’re staring down the barrel of a low-return decade. They’ve been around for aRead More
Somebody Has to Crunch These Numbers: Infrastructure Cash Flow
Jun 5th, 2016 | Filed under: Infrastructure, Newly Added, Operationally Intensive Real Assets, Real AssetsEDHEC Infrastructure Institute-Singapore recently released a paper on the cash flow dynamics of private infrastructure project debt. The gist of the paper is that investors’ ability to understand credit risk in private infrastructure debt turns on advanced statistical techniques. Or, in the authors’ words, “the nature of the data requiresRead More
Infrastructure, Dividends and Path Dependence
Apr 21st, 2016 | Filed under: Infrastructure, Newly Added, Operationally Intensive Real Assets, Real AssetsA new paper from EDHEC Infrastructure Institute-Singapore argues that infrastructure firms represent a unique business model, one with lower revenue volatility, higher payouts, and substantially lower correlation with the business cycle than other firms. An “infrastructure firm” for purposes of this discussion is either a special purpose vehicle created inRead More
An Overview of Real Asset Investing
Aug 26th, 2015 | Filed under: Infrastructure, Intellectual Property, Private Equity, Real Estate, Risk managementGuest columnist Andrew Smith, CAIA, provides an overview of real assets and their commensurate risks and rewards.Read More
PwC Looks Ahead to 2020: Offers a Roadmap for Alternative Investment Managers
Jul 5th, 2015 | Filed under: Emerging markets, Hedge Fund Industry Trends, Hedge Fund Strategies, Infrastructure, TechnologyPwC offers a glimpse of a 'day in the life' of a typical compliance analyst in 2015 and again in 2020. As these authors tell it, the day is filled with data, darkness, and drudgery at present, but it will be airy, alliterative, and analytical in another five years. Read More
Farm Land: The Risks & Rewards of Buying Direct
Jun 7th, 2015 | Filed under: Farmland, Infrastructure, Institutional Investing, Real EstateGuest columnist Andrew Smith, CAIA, examines the risks and rewards of investing directly in farmland.Read More
Some Assets are Hard to Ignore
Apr 23rd, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Currencies, Gold, Hard metals, InfrastructureGuest columnist Diane Harrison looks at the world of alternatives to alternatives, including stamps, cars, farmland and more...Read More
Gazelles, Exports, and Infrastructure: A View from the UK
Mar 11th, 2015 | Filed under: InfrastructureThe Confederation of British Industry has taken a look at some of the issues that do and should concern investors in the industries of those islands. Among much else, the CBI wants the government to kick-start the private placement market. And to worry more about infrastructure. Read More
Long-Term Infrastructure Debt: The Valuation Issue
Feb 26th, 2015 | Filed under: Alpha Strategies, Infrastructure, InsolvencyThree authors at EDHEC propose a two-step modeling process for the valuation of certain infrastructure debt. One of the key ideas they incorporate is the value of the step-in rights that come when the issuers violate a covenant or otherwise find themselves in technical default. Read More
Down Memory Lane: That WTI-Brent Divergence
Feb 18th, 2015 | Filed under: Commodities, Infrastructure, oilFor one professor, the surprising divergence in the prices of WTI/Brent crude in the period 2010-2012 was a case study in how commodity prices can teach us about supply chain conditions. Faille looks back at his article, and forward past today's calmer but still-fluctuating spread. Read More
The Building of an Infrastructure for Renewables: A Report
Nov 5th, 2014 | Filed under: Alternative energy, Commodities, Infrastructure, Private Equity, Socially responsible investingIn 2012, [as the crude oil price was settling in to $110 and low vol,] the renewables’ infrastructure space for private funds reached an aggregate estimated deal value of $132 billion. In 2013, that fell to $95 billion. It now seems unlikely that 2014 will match last year. Read More
Custodians Helping Customers with Securities as Collateral
Sep 11th, 2014 | Filed under: Infrastructure, Insolvency, Risk managementHow address issues of supply/demand imbalance in the world of collateral requirements? Custodians can do a good deal on behalf of their customers here, and are exploring just how much. Read More
Advancing the Infrastructure Investment Narrative
Aug 11th, 2014 | Filed under: Alpha Strategies, Infrastructure, InsolvencyIntuitively, the problem with valuing the debt issued by an private SPE in an illiquid infrastructure project is this: the free cash flows of the SPE aren't easily observed. So how does one go about deriving their present value? Read More
EDHEC: Investors Who Don’t Want to be Mushrooms Need Benchmarks
Jun 16th, 2014 | Filed under: Infrastructure, Private EquityInvestors need benchmarks, especially benchmarks of likely infrastructure return, because the long-term illiquid nature of that investment increases information asymmetry between investors and managers, whereas benchmarks keep this asymmetry bearable. So explains Frédéric Blanc-Brude of EDHEC. Read More
Squeezed Margins and a Move to the Clouds
Jun 12th, 2013 | Filed under: Infrastructure, Performance, Analytics & MetricsThe world of cash equities trading is changing and will continue to change, says Celent. Brokerages will have to outsource in order to reduce costs and restore their margins: and some of the outsourcing will involve "the cloud."Read More
Investing in Britain’s Infrastructure: With and Without Guarantees
Jan 28th, 2013 | Filed under: Infrastructure, Institutional InvestingThe bottom line of EDHEC's study is that there is no need to create new public sector liabilities to get private sector institutions to invest in infrastructure. Read More
More than $3 Trillion AUM for Top 100 Alternative Investment Managers
Jul 25th, 2012 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Infrastructure, Institutional Investing, Private Equity, Real EstateThe survey also asked that the asset managers state where their total assets are invested, using four geographical categories: Europe; Central/North America; Asia Pacific; Other. Commodity funds were easily the most heavily invested in C/NA, to the extent of 94 percent of their portfolios. Private equity funds are 61 percent invested in C/NA, and PE FoFs also have the majority of their portfolios there, at 54 percent.Read More
Pension Funds and Blair’s PFI Legacy
Mar 21st, 2012 | Filed under: Infrastructure, Institutional Investing, Social investingBritain’s Private Finance Initiative has continued through the administrations since Blair’s, and indeed has inspired emulation across the Channel. At the same time, it has stirred up a good deal of criticism, and in November 2011 the Chancellor of the Exchequer announced a plan to reform the PFI. One of the reform proposals is to seek broader participation by pension funds, or in pale bureaucratic jargon, “access a wider range of financing sources.”Read More
Crumbled Portfolios Look to Rebuild with Infrastructure Investments
Feb 9th, 2012 | Filed under: Alpha Strategies, InfrastructureInfrastructure is a perpetual investment, whether it's rebuilding old, existing underpinnings in developed markets or building the foundations that turn an emerging nation into a developing one. Preqin looks at this lesser known investment that underpins many alternative portfolios.Read More