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 Business School hosts the Family Business Extension  of the 38th Strategic Management Society (SMS) Annual Conference
News
- 18-05-2018
  Like in previous years, the 2018 Family Business Extension will bring together a...
Award
News
- 17-05-2018
Photo: Award-winning Messaoud Chibane, PhD (2016) and Alain Papiasse, BNP Paribas...
30 years of impact for EDHEC : A ceremony in honour of Olivier Oger
News
- 17-05-2018
Staff, professors, Alumni, historical partners: they have all met on the Nice and Lille...
PUBLICATION
News
- 16-05-2018
Jeroen Jansen’s article “Local Volatility and the Recovery Rate of Credit Default Swaps...