Infrastructure as an Asset Class
EIB Papers, Vol. 15, No. 1, pp. 70-105, 2010
36 Pages Posted: 11 Jun 2011
Date Written: June 9, 2011
Infrastructure as a new asset class is said to have several distinct and attractive investment characteristics. This article reviews concepts, market developments and empirical evidence on the risk-return and cash flow profile, and the potential for diversification and inflation protection in investor portfolios. Furthermore, a new, global analysis of the historical performance of infrastructure funds is undertaken. There is no proper financial theory to back the proposition of infrastructure as a separate asset class. Infrastructure assets are very heterogeneous, and empirical evidence suggests an alternative proposition that treats infrastructure simply as a sub-asset class, or particular sectors, within the conventional financing vehicle on which it comes (e.g. listed and private equity, bonds).
Keywords: Infrastructure investment, Infrastructure fund, Alternative asset, Real asset, Asset allocation, Performance analysis
JEL Classification: G11, G15, G22, G23, H54
Suggested Citation: Suggested Citation