Performance Drivers in Private Infrastructure Funds

47 Pages Posted: 14 Feb 2019 Last revised: 9 Feb 2021

See all articles by Martin Haran

Martin Haran

Ulster University

Daniel Lo

Ulster University

Stanimira Milcheva

University College London

Date Written: February 5, 2019


Research on infrastructure as an asset class is still in its infancy due to the lack of data. Investors have approached the performance evaluation of infrastructure deals from the lens of either real estate or private equity. We use fund-level cash flow data to construct three performance metrics: the internal rate of return (IRR), the public market equivalent (PME) and the total value to paid-in capital (TVPI) and assess the performance drivers of private infrastructure funds. Our results highlight that private infrastructure funds exhibit a different performance pattern to mainstream private equity funds and to real estate private equity. Performance determinants such as fund size, investment style, fund specialisation, sector, location do not seem to explain the cross-section in performance indicators. All else equal, oversubscribed funds deliver a worse performance. Results for persistence across follow-on funds are inconclusive and we find mild momentum effects. Our results have implications for investors in real assets and less transparent markets. Overall, the private infrastructure fund sector is still in its infancy and conventional wisdom from general private equity or real estate research may not yet apply to infrastructure funds.

Keywords: Private infrastructure funds, performance, persistence, internal rate of return, public market equivalent.

JEL Classification: G24

Suggested Citation

Haran, Martin and Lo, Daniel and Milcheva, Stanimira, Performance Drivers in Private Infrastructure Funds (February 5, 2019). Available at SSRN: or

Martin Haran

Ulster University ( email )

Northland Road
Londonderry, BT48 7JL
Northern Ireland

Daniel Lo

Ulster University ( email )

Shore Rd, Newtownabbey
Newtownabbey, Northern Ireland BT37 0QB
United Kingdom

Stanimira Milcheva (Contact Author)

University College London ( email )

1-19 Torrington Place
Bartlett School of Sustainable Construction
London, London WC1E 7HB
United Kingdom


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