As of 2019-09-30 the EDHECinfra Global Broad Market Unlisted Infrastructure Equity Index had a total market capitalisation of USD337.35bn, representing 516 firms. Since inception, a total of 621 firms have been included in this index.
EDHEC Infrastructure Institute Singapore

The 2019Q3 version of the EDHECinfra indices was released last week.
As of 2019-09-30 the EDHECinfra Global Broad Market Unlisted Infrastructure Equity Index had a total market capitalisation of USD337.35bn, representing 516 firms. Since inception, a total of 621 firms have been included in this index.

Overall, expected returns continue to decrease at an average Index-level IRR (yield to maturity) of 6.7%. This continued decline in discount rates produced higher capital returns in Q3. On a local currency (fully hedged) basis, the index returned 3.75% in Q3, broadly in line with its Q2 gain of 3.60%. Infrastructure equity returns have been on the rise in 2019 and this trend continued into the second half. Lower market risk premiums bolstered performance, combined with interest rate cuts around the world.

In terms of sector performance, returns of the Renewables and Roads indices more than doubled over the quarter, while returns from Social, Network Utilities and Airport indices declined. Despite this, gains in the Network Utilities and Transport sectors accounted for almost 80% of the global index return due to their large weights in the index.

USD index returns have been on the decline, shrinking to 0.34% in Q3 from 1.46% in Q2. This stems from significant depreciation of the GBP against the USD and the heavy weight of UK firms in the index as, overall, infrastructure equity returns in local currency increased in 2019. USD unlisted infrastructure equity index outperformed both public equity and listed infrastructure equity in Q3.

Broad Market Unlisted and Listed Infrastructure Indices
Philippines based companies were the top five performers in Q3, aided by the government’s aggressive rate cuts; however, they have a combined weight of less than 0.1% in the index. The worst performer was an independent power producer in the UK that went through an impairment last year. Higher leverage has historically implied higher risk premiums, but sensitivity to this factor has almost halved since the financial crisis period. Overall, leverage and term spread were the key contributors to the reduction in risk premiums in Q3. Finally, there was no change to the index constituents in this quarter. FGP Topco Limited, the owner of Heathrow Airport, remains the highest weight in the index. A new entrant to the top five weights is Severn Trent Water Limited, a UK-based water and wastewater treatment firm.

The Global unlisted infrastructure equity, value-weighted EDHECinfra index is a market value- weighted representation of the Global Private Infrastructure Equity Market. It covers all investable infrastructure sectors as defined by the TICCS classification. Index constituents include all business models and both infrastructure projects (SPVs) and corporates.

To find out more:
- Download the index factsheets here: LCL returns | USD returns
- Access the EDHECinfra online platform for detailed data and analytics. Sign up here for your complimentary access to the Broad Market Indices.
To request your sub-indices packages, write to Karen (karen.sequeira@edhec.edu) or fill the form on our website.

EDHEC Infrastructure Institute-Singapore
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Singapore 049145
http://edhec.infrastructure.institute


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About EDHEC Infrastructure Institute Singapore (EDHECinfra):

EDHECinfra exists to answer one simple question: why does infrastructure have value? We collect data, develop methodologies and produce research and tools to identify the financial, economic and social value of infrastructure assets. In 2019, we launched a series of global indices and benchmarks capturing the risk-adjusted performance of private investments in infrastructure equity and debt. We have built the largest database of infrastructure investment data in the world, created a cutting-edge asset pricing technology to estimate the fair value of illiquid assets. EDHECinfra is now the main knowledge repository for infrastructure investors. We are also developing tools to gauge the ESG risks and impacts present in infrastructure investment, including social acceptability, physical risks, and the usefulness of infrastructure assets, all things which determine their current and future value.

http://edhec.infrastructure.institute
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