- June 2012: Vol. 5, Number 6

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Listed Infrastructure

by Frank Garcia and Manoj Patel, with Stella-Yun Xu

Strategic asset allocation, the process of determining target allocations based on a set of assets, is widely regarded as the most important decision in the investment process. This article aims to evaluate the role of listed infrastructure in a strategic asset allocation and begins by examining the sector’s alternative and equity-like asset characteristics. Next, we examine the role of listed infrastructure in a diversified portfolio by performing historical mean-variance analyses and consider differences between theoretical unconstrained portfolios versus realistic constrained portfolios. Finally, we conduct a forward-looking mean-variance analysis with and without listed infrastructure included in the opportunity set. We end the report with conclusions and implications for investors.


We begin by evaluating the hybrid alternative and equity-like asset characteristics inherent within listed infrastructure. While it is fairly easy to separate t

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