Institutional Investing in Infrastructure

July 1, 2020: Vol. 13, Number 7

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From the Current Issue


Off the grid: Finding the opportunities in power and grid storage depends on risk tolerances and where the trends are headed

It is almost impossible to talk about energy without the word “renewable” preceding it. In 2018 a total of 181 gigawatts of renewable power was added to the world’s power supply, according to the Ren21 Renewables 2019 Global Status Report. In the United States, renewable energy is the fastest growing energy source, increasing 100 percent from 2000 to 2018, according to the Center for Climate and Energy Solutions. Breaking that out further, renewables made up more than 17 percent of net U.S. electricity generation.


Opportunity for a stronger approach to delivering infrastructure

As the world, and in particular for the purpose of this article, Canada and the United States, faces unprecedented economic shock, investment in public infrastructure will play a critical component in a stimulus and recovery program. Fighting the COVID-19 virus and meeting the economic demand for fiscal and liquidity measures goes well beyond the experience of the 2008 financial crisis and is likely more similar to the impact of World War II on the world economy.


The infrastructure benchmark report: Infrastructure performance through the COVID-19 crisis

The second quarter 2020 release of the EDHECinfra indices marks a new quarter of negative returns for the unlisted infrastructure asset class. The infra300 index* is down –1.5 percent on the quarter ending June 30, 2020. This index measures the average mark-to-market performance of 300 unlisted infrastructure equity investments that make a representative sample by sector, corporate structure and business model of the investible universe in 22 countries.


This is not a test: The COVID-19 crisis shows us that partnership between government and private investors and operators is essential for a resilient society

When the final chapter of the COVID-19 crisis as it relates to infrastructure investing is written, perhaps the most important takeaway will be this: This asset class, more than most, shows us that partnership between the public and private sectors is essential. A society’s resilience depends on shared ambitions and responsibilities and this is evident in the infrastructure sectors.


A growing need: Asia Pacific holds infrastructure investment opportunities

Infrastructure is an asset class that first emerged in Australia in the 1990s. It is defined by a set of unique characteristics, such as high barriers to entry and inelastic demand, that enable infrastructure assets to generate revenues and cashflows that are stable and predictable over the long term. Infrastructure traditionally covers assets such as power generation, transmission and distribution assets; water treatment plants; telecommunication infrastructure; and transportation assets (e.g., roads, ports and airports).


Vital viewpoints: Insights and perspective from the i3 Virtual Roundtables

In light of today’s charged atmosphere, with opinion and dialogue increasingly being less about a search for truth and more about categorizing people, I have decided to defer to 2021 before putting personal views in writing. In the interim, the market perspective segment is going to be a compilation of the key takeaways from our i3 Virtual Roundtable series. For those unfamiliar, since April we have been hosting weekly video meetings with eight to 12 investors, consultants and our publication sponsors to stay connected and discuss the markets.


Three leaders discuss integration of ESG principles

Institutional Investing in Infrastructure senior editor Drew Campbell discussed the state of ESG policy in infrastructure investing with three leaders in the market — Viola Joncic, head of sustainability with Commerz Real; Shuen Chan, head of ESG, LGIM Real Assets; and Chris Newton, executive director of responsible investment with IFM Investors. The following is an excerpt of their conversation.


How to invest in Gov. Cuomo’s infrastructure plan

In today’s turbulent global markets, institutional investors are sitting on the sidelines. Fund managers are wary of making long-term commitments to business enterprises, which may not survive the year. The public health and political risks inherent in the COVID-19 era have produced such market uncertainty that mitigating today’s risks seems insurmountable.


Qualifying infrastructure under Solvency II and CRR II, ESG and COVID-19

Regulated financial investors, such as banks or insurers, invest into infrastructure assets for various reasons, such as diversification, stable cashflows or excess returns through illiquidity premiums. At the same time, those investor groups are subject to extensive and dynamic regulatory frameworks, such as Solvency II or CRR I/II. Recent developments in the area of sustainable finance/ESG, as well as COVID-19, are also covered by the regulations. GPs aiming to raise funds from regulated LPs need to understand how those requirements are interconnected and optimize them accordingly.

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