As a market, institutional infrastructure investing has slowly but surely been creating tools that practitioners — whether pension and other investors, investment managers, the public sector, or anyone else with a stake in the market — can use to determine the performance of investments.
Listed infrastructure indices have been with us for a long time, but more recently unlisted infrastructure indices have come on the scene. That is great news — more and better information can help people make better decisions and set performance expectations.
One of the recent entrants in unlisted infrastructure investment benchmarking is MSCI, formerly IPD. In June, MSCI published Sectoral Aspects of Global Infrastructure Investment, a report that looks back at the performance of its infrastructure indices since 2009, when index data begins.
The findings of the report are interesting and encouraging, in that they allow us to see nuances within the institutional infrastructure investment market as seen by these indices. For example, the data shows “a degree of sectoral variation within the index. Transport and power, the two dominant streams of activity in the index, have experienced both differential performance and differential volatility in the post-crisis recovery. The timing of each sector’s cyclical recovery has also varied.”
In other words, the performance history shows the different sectors perform differently over time, and that’s important.
One of the complaints we’ve heard from investors about infrastructure investing over the years is that not enough independently available infrastructure investment performance data exists that can give this type of detailed understanding of infrastructure.
Not only are more indices popping up to show headline performance numbers, but now these companies are publishing more detailed information.
Maybe it was out there already, but I have not previously seen sectoral performance findings from an independent unlisted infrastructure index. Where once investors were asking for any infrastructure performance index, perhaps we will start hearing new demands for more and greater detailed information. That will keep us all busy, — and that’s a good thing.
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Drew Campbell is senior editor of Institutional Investing in Infrastructure.
