Portfolio Infrastructure Investments: an Analysis of the European and UK Cases

Infrastructure has been receiving much attention in recent years. Investment banks and fund managers are increasingly promoting the investment characteristics of infrastructure assets and they argue that investing in infrastructure should be ideal for institutional investors such as pension funds. However, the claim lacks empirical support. We suggest that the limited research on infrastructure is mainly due to scant empirical data. The objectives of this paper are to examine the significance of economic infrastructure as an asset class by assessing the investment characteristics and performance of infrastructure indexes in Europe and UK from 2000-2014, to analyse how an infrastructure portfolio should be constructed and to determine whether the private sector should invest in an infrastructure portfolio containing a variety of infrastructure sectors or if the private sector should invest in one specific sector only

Portfolio Structuring Model for Urban Infrastructure Investments

The objective of this work is to propose a new methodology based on the concept of portfolio structuring for urban infrastructure investment. We argue that city investments need to be treated as an integrated and interdependent entity and from this perspective, the portfolio methodology is proposed in order to assess the non-financial impacts of infrastructure projects and then combine them in a portfolio of investments from a financial perspective. The methodology is applied for a set of project under the EIB JESSICA Initiative. The methodology shows that not only is it possible to develop a practical decision support system to assist stakeholders in assessing the performance of individual urban infrastructure projects, but also how it is possible to combine projects into a portfolio. The method exceeds the simple analysis of returns of individual investment schemes and capitalizes on effective and integrated management of projects/investment. And this is the key to devising a focused response which will enable therefore cities to be globally competitive, via innovative financial and business models

A portfolio approach for urban investments

The projects that are financed in an urban environment depend on a variety of factors. With the portfolio approach cities can determine which projects benefit them most in terms of profits and social benefits and can choose them accordingly

Impact investment for urban cultural heritage

Impact investing is an emerging but fast fast-growing field in the financial industry. Urban cultural heritage investments having tangible and intangible features are often found in the asset allocation of impact investment portfolios. In this paper we map out the different financial mechanisms of impact investment in the heritage and creative sector and provide comprehensive coverage of several case studies. We assert that cultural heritage is likely to render different impacts and financial returns, so it is important to choose the appropriate investment mechanisms for financing cultural heritage. From this perspective, we present the structure of an impact investment fund dedicated to urban cultural heritage, adopting a portfolio approach to combine different types of capital and to support creative place-making at city or regional level

A new measure of resilience: An application to the London Underground

The many varied views on resilience indicate that it is an important concept which has significance in many disciplines, from ecology to psychology to risk/disaster management. Therefore, it is important to be able to quantifiably measure the resilience of systems, and thus be able to make decisions on how the resilience of the system can be improved. In this paper we will work with the definition, due to Pimm (1991), that resilience is "how fast a variable that has been displaced from equilibrium returns to it." We will think of a system as being more or less resilient depending on the speed with which a system recovers from disruptive events or shocks. Here we consider systems which revert to an equilibrium state from shocks, and introduce a measure of resilience by providing a quantification of the rapidity of these systems' recovery from shocks.We use a mean-reverting stochastic model to study the diffusive effects of shocks and we apply this model to the case of the London Underground. As a shock diffuses through the network, the human-flow in the network recovers from the shock. The speed with which the passenger counts return to normal is an indicator of how quickly the line is able to recover from the shock and thereafter resume normal operations

Portfolio of Infrastructure Investments: Analysis of European Infrastructure

Infrastructure has received much attention in recent years. Investment in infrastructure is particularly effective and has been recommended to institutional investors for investments such as pension funds because of the characteristics of infrastructure assets. However, robust analytical and empirical analyses in support of these investments are limited, mainly due to scant empirical data. In this work, by collecting relevant data sets on infrastructures, the authors address two objectives. First, the authors examine the significance of listed infrastructure sectors and subsectors by assessing the investment characteristics and performance of different infrastructure indexes in Europe. The aim here is to demonstrate how an effective and successful infrastructure portfolio should be constructed. The second objective of this research is to evaluate the strategy of infrastructure investors, in other words, to prove evidentially whether the investor should invest in a portfolio containing different infrastructure sectors or whether it is still possible to obtain diversification benefits by investing in only a single infrastructure sector

The port attractiveness index: application on African ports

The overall operational reputation of a port is based on objective factors, including infrastructure endowments and efficiency in the logistics chain as well as on perceived subjective factors such as reliability, and level of corruption. In this work we analyze the concept of port attractiveness, starting with the hypothesis that subjective port determinants (i.e., user perception) and objective/endogenous and exogenous factors can be quantified together. We thus determine the Port Attractiveness Index and test it using 41 container ports of 23 African countries for the period 2006-2010. We apply a bottom-up approach to investigate the structural relationships among the three sets of determinants (endogenous, exogenous and subjective) that impact on port attractiveness. Our methodological approach employs structural equation modeling. Results indicate that subjective factors are indeed influential variables for port attractiveness. Moreover, when examining port attractiveness and investment strategies, we demonstrate that in many cases in African ports governments should implement soft infrastructure as a first step rather than investing in hard infrastructures

The Creation and Benchmarking of a Green Municipal Bond Index

As the green bond market grows, many are wondering if there is a pricing difference between green bonds and conventional bonds. In order to explore these ideas, we created bond indices specific to the green-labelled and climate-aligned municipal bond market, primarily to test the competitiveness of the green sector of the muni bond market against the overall muni bond market. We used the S&P municipal bond index construction methodology in order to compare like with like, and benchmarked the green and climate indices against their counterpart S&P municipal indices. We find that the green and climate muni indices showed CAGRs of 4.5% from 2014 to 2017, compared with 3% for the S&P Investment Grade Municipal index. We also created several sector and state sub-indices, which also outperformed their S&P counterparts