Valuation drivers and trends, 2000-2021

The volatility of infrastructure equity investments is the risk which investors take to receive a reward for holding such assets. A robust measure of this risk and its drivers is an essential part of the inclusion of infrastructure investments in the portfolio, from strategic asset allocation to risk management and reporting, to manager compensation.

However, measuring this risk is difficult because the only available data is often limited to quarterly appraisals that do not reflect the current state of market prices but are instead ‘stale’ i.e. backward-looking and lead to very ‘smooth’ returns, exhibiting highly unrealistic (low) levels of risk per unit of return.

In this paper, EDHECinfra examines the drivers of the volatility of unlisted infrastructure equity investments and the reasons why the market prices of such investment can and do vary over time.

Download this white paper to find out more.