The Canada Pension Plan Investment Board (CPPIB) is planning to employ factor investing when sourcing new infrastructure assets, according to one of its senior executives.
Rossitsa Stoyanova, director of total portfolio management at the CAD282.6bn (€186.5bn) asset owner, said the investor would like to “get into infrastructure in the factor space”.
Speaking at the inaugural EDHECinfra conference in London, she added: “We would actually like to get more of our asset classes into the factor space – and again, the challenge there is data.”
Stoyanova previously lamented the absence of data, which she said proved problematic since CPPIB had first entered the infrastructure market in 2004.
As of December last year, the fund had CAD20.5bn in infrastructure, or around 7% of assets, spread across 16 assets.
Stoyanova said investments were previously divided into assets based on economic drivers.
However, she said the fund would like to begin exploring risk-factor investing, and that CPPIB already had some ideas as to which risk factors could be employed.
She said economic growth, real risk, inflation and equity premiums could all form part of the new approach.
However, she also listed term structure, credit conditions, liquidity and regulatory risk as potential factors.
Her comments came after Frédéric Blanc-Brude, director of EDHEC Infrastructure Institute-Singapore, discussed the initial results of a survey that found a small number of “sophisticated” investors were no longer viewing infrastructure as an asset class but rather basing decisions around risk factors.
