Pension Fund Investment in Social Infrastructure

In this publication, we extend our response to the issues relating to pension fund investment in social infrastructure.

Author(s):

Frederic Blanc-Brude

Research Director at EDHEC Risk Institute–Asia.

Social infrastructure investments have by design the characteristics that pension funds find attractive in a liability-driven investment context: long-term contracts with steady and predictable inflationlinked income, high operating margins and high risk-adjusted return. Social infrastructure also corresponds to the bulk of the assets procured under the PFI and a model that has successfully been exported to the rest of Europe, and beyond to Asia and the Americas. Moreover, social infrastructure investment may address some of the shortcomings of the general infrastructure investment case, which we outlined in our original response. ‘Economic’ infrastructure in particular tends to be too lumpy and fragmented for investors to contemplate holding a representative basket of investable infrastructure assets. Thus there is no available passive infrastructure investment strategy that a pension fund can follow by holding a highly diversified portfolio. Actual investments are likely to include exposures to the class and to firm-specific risk.
Pdf
Pension Fund Investment in Social Infrastructure...
(-1.00 B)
Type: EDHEC Publication
Date: le 24/02/2012
Extra information : For more information, please contact EDHEC Research and Development Department [ research@drd.edhec.edu ]
Research Cluster : Finance

See Also

EDHEC EXECUTIVE EDUCATION SPOTLIGHT WEBINARS
News
- 28-05-2020
In the current climate of uncertainty and complexity, as manager and leaders we are all...
Why I joined the MSc in Management Studies
News
- 27-05-2020
WHAT IS YOUR EDUCATIONAL BACKGROUND PRIOR TO EDHEC? I studied International Politics...
Le Parisien 2020 Business School Ranking
News
- 26-05-2020
EDHEC ranked 4th among French business schools   Complementing its continued strong...
An EDHEC EMBA at the heart of the €1,000 Artificial Ventilator
News
- 25-05-2020
Arthur Dagard, an EMBA student and intrapreneur with Iliad, volunteered to take part in...