Institutional Investors and Infrastructure Investing

Aleksandar Andonov, Kräussl, Roman and Joshua Rauh
Authors registered in the RePEc Author Service: Roman Kräussl

No 15946, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Institutional investors expect infrastructure to deliver long-term stable returns but gain exposure to infrastructure predominantly through finite-horizon closed private funds. The cash flows delivered by infrastructure funds display similar volatility and cyclicality as other private equity investments, and their performance depends similarly on quick deal exits. Despite weak risk-adjusted performance and failure to match the supposed characteristics of infrastructure assets, closed funds have received more commitments over time, particularly from public investors. Public institutional investors perform worse than private institutional investors, and ESG preferences and regulations explain 25-40% of their increased allocation to infrastructure and 30% of their underperformance.

Keywords: Infrastructure; Public pension funds; Institutional investors; Esg regulation (search for similar items in EconPapers)
JEL-codes: G11 G23 G28 H54 H75 (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-cwa
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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