Performance and Persistence in Private Infrastructure Funds

33 Pages Posted: 8 Dec 2019 Last revised: 18 Dec 2019

See all articles by Martin Haran

Martin Haran

Ulster University

Daniel Lo

Ulster University

Stanimira Milcheva

University College London

Date Written: November 21, 2019


Private infrastructure funds have contributed to about 10% of global infrastructure investment in the last decade, managing $483 billion assets at the end of October 2019 according to Preqin. Given the marked expansion in private funds investing in infrastructure, this paper undertakes a detailed analysis of the key performance drivers. We use two sets of data: fund-level cross-sectional reported performance and fund-level performance over time of the internal rate of return (IRR), the public market equivalent (PME) and the total value to paid-in (TVPI) based on fund cash flow data. We find that private infrastructure funds show a different performance pattern to private equity funds. Most notably, funds show negative current persistence across follow-on funds. Investors should use a range of performance metrics as those are driven by different cross-sectional factors. Moreover, individual performance is only to 10% explained by the performance of similar funds. Funds that overshoot their target value deliver a worse performance. Finally, more risky funds based on their fund style do not necessarily deliver higher returns. Overall, the private infrastructure fund sector is still in its infancy and conventional wisdom from general private equity fund research does not necessarily apply to infrastructure funds.

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

JEL Classification: E44

Suggested Citation

Haran, Martin and Lo, Daniel and Milcheva, Stanimira, Performance and Persistence in Private Infrastructure Funds (November 21, 2019). Available at SSRN: or

Martin Haran (Contact Author)

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

University College London ( email )

1-19 Torrington Place
Department of Construction and Project Management
London, London WC1E 7HB
United Kingdom

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