The Investment Property Databank (IPD) has launched a global infrastructure index as it looks to measure returns and benchmark performance.
The data provider’s Global Infrastructure Direct Asset Index was launched in Australia today.
The company said it hoped to provide a “robust measure” of return performance and increase transparency.
Speaking with IP Real Estate, IPD executive director Anthony de Francesco said infrastructure had evolved “in such a way that it’s become its own asset class”.
“The sector was still classified as part of alternatives up until relatively recently,” De Francesco said.
He said IPD would look to grow the index’s coverage of investors and investments, as well as by region and sub-sector.
“Segmentation will capture most infrastructure investment,” De Francesco said. “Similarly to real estate, infrastructure is a heterogeneous sector with diversity of asset type.”
De Francesco said the new index would build on IPD’s Australian infrastructure index, launched in late 2012, as the company looks to increase coverage of the UK and Continental Europe, as well as North America and Asia.
Speaking at Stirling Capital’s Infrastructure Investment Conference for Pension Funds last week, IPD managing director Peter Hobbs said infrastructure’s lack of data or benchmarking was a concern – and could lead to wrong investment decisions being made.
On a panel comparing real estate with infrastructure, Hobbs said: “Infrastructure is an opaque sector. That’s a recipe for mistakes being made.”
Hobbs said there was a risk investors would pull back from the infrastructure sector in favour of more “readable” investment opportunities.
As of June, the annual total return on infrastructure was 14.7% – consisting of a 4% income return and a 10.4% capital return.
Airports dominated allocation by sector, accounting for 25% of investments.
Transport and water both accounted for 22% allocations.