According to a new paper by EDHECInfra, titled Strategic Asset Allocation with Unlisted Infrastructure – Better Data for Sensible Results, allocation to unlisted infrastructure in institutional portfolios remains low, in part due to the lack of adequate policy benchmarks for this asset class.
EDHECInfra posits that traditional indexes used as proxies for unlisted infrastructure fail to represent the qualities of the asset class. According to the paper, the majority of investors are under-invested in this asset class because they lacked data showing the potential of infrastructure equity and debt in the total portfolio.
The paper argues that selecting the right benchmark could change investors’ preferred asset allocation to infrastructure equity and debt.
EDHECInfra conducted multiple robustness tests to assess how investors can improve the quality of their asset allocation by using data that matches their exposures to different infrastructure subseg