Infrastructure as an Asset Class

EIB Papers, Vol. 15, No. 1, pp. 70-105, 2010

36 Pages Posted: 11 Jun 2011  

Georg Inderst

Inderst Advisory

Date Written: June 9, 2011

Abstract

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

Inderst, Georg, Infrastructure as an Asset Class (June 9, 2011). EIB Papers, Vol. 15, No. 1, pp. 70-105, 2010. Available at SSRN: https://ssrn.com/abstract=1860947

Georg Inderst (Contact Author)

Inderst Advisory ( email )

4 Evangelist Road
GB London, NW5 1UB
United Kingdom

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