EDHEC hopes to release its first investible infrastructure benchmark by the end of the year, after it successfully collected data on nearly 500 projects dating back 20 years.
Work undertaken by the EDHEC Infrastructure Institute-Singapore, established after its work on the asset class was spun out from the French business school, will see it release benchmarks covering the infrastructure debt and equity universe across OECD markets, according to the institute’s director Frédéric Blanc-Brude.
Speaking at the inaugural EDHECinfra conference in London this week, Blanc-Brude said research had seen it gather data on 500 projects across the equity and debt space, equating to half a million data points, and as some of the data went back as far as 20 years, the indices would effectively have a track record on launch.
He added that he hoped the indices’ combined universe of projects would expand to 1,500 by the end of 2017.
Blanc-Brude said the “very ambitious” project could have not been undertaken without the support of the EDHEC Business School and the Singaporean government, which will provide funding for five years.
But he also thanked Natixis for its support by sponsoring the position of research chair on infrastructure debt.
“This work has paid off,” he added. “It has helped to create a definition of infrastructure investments, which has been useful in the qualification of infrastructure – for example, in the discussion around Solvency II.”
Blanc-Brude said two further research chairs would be funded, one by Natixis and one by the Long-term Infrastructure Investors Association (LTIIA).
Anne Christine Champion, global head of infrastructure and projects at Natixis, said the development of benchmarks was key if large volumes of assets were to flow towards infrastructure debt.
“Because insurers, pension funds – whatever the solution they choose to invest in [infrastructure] debt with captive asset managers or others – will have to benchmark performance of those entities that manage the assets,” he said.
Eugene Zhuchenko, last year appointed the LTIIA’s first executive chairman, also stressed the importance of the research chair his organisation was sponsoring to contribute to the debate around environmental and social outcomes of infrastructure investment, and more broadly the role of non-financial metrics for the index.
“For longer-term commitments,” he said, “the prominence of [environmental, social and governance] risks tends to be higher than for shorter-term commitments, and that triggers additional interest in better understanding that interplay – and, indeed, testing the hypothesis to what extent investing more responsibly pays.”
