Infrastructure as an Asset Class

Investment Strategy, Sustainability, Project Finance and PPP

Investors in infrastructure such as pension funds, insurance companies and sovereign wealth funds, pursue multiple objectives. First and foremost, they seek long-term stable returns to match their long-term liabilities. Second, they look for portfolio diversification. Infrastructure investments, due to their low correlation with other asset classes, enable investors to improve the overall risk and return profile of portfolios.

Infrastructure as an Asset Class is considered by many as the standard work of infrastructure investing, thanks to its comprehensive guidance during challenging times for investors. This Second Edition has been extensively updated and expanded. It now also covers the energy sector – from generation to transmission, storage and district energy systems – and sheds light on sustainable investing in infrastructure, an indispensable topic, which any long-term professional investor can no longer ignore.

It introduces a strategic approach to benchmarking the financial performance of infrastructure investments and presents various sustainability benchmarking tools used across the industry. Bringing together the topics of infrastructure investments, project finance and public private partnerships (PPPs), has proven to be crucial for equipping investors with the essentials of theory, fundamentals and practical examples needed to fully master the key aspects of infrastructure investing.

This single-source guide for newcomers and experienced investors alike covers all aspects from basic fundamentals to highly specific infrastructure investment-related questions such as: How to define infrastructure, how to classify the ownership structures and business models in various industry sectors; what the main characteristics, sources of revenue and value chain elements, competition and regulation and investment opportunities in the various infrastructure sectors are; and how the broad spectrum of risks can be systematically analysed, evaluated and mitigated through adequate structuring of transactions. It also explains in detail how project finance works both in a traditional and in a PPP context.

• This updated edition includes the latest developments on the subjects covered, which makes it an extremely relevant source of guidance for infrastructure investors in both industrial and emerging market countries, and enables them to:
• Know about relevant developments in current infrastructure markets
• Assess individual infrastructure assets step by step for their suitability within an investment strategy, including sustainability aspects
• Understand all factors determining risk-return profiles of infrastructure assets, including ESG and, in particular, climate change risk and how to mitigate such risks
• Learn from illustrative real-world case studies on infrastructure assets across countries

Even experienced infrastructure investors who have read the first edition will find this revised standard work Infrastructure as an Asset Class, Second Edition, very useful as it supports them in their tasks of identifying and assessing suitable investment opportunities and making well-informed investment decisions.

"A comprehensive and well-written overview of many relevant topics in the infrastructure sector; a useful guide for everyone involved or interested in the infrastructure area."

Henk Huizing, Head of Infrastructure, PGGM

"A comprehensive book that effectively marries the topics of infrastructure investing, project finance and PPPs as well as bridges the gap between the theoretical and the practical - the authors are to be commended on this work."

Marc S. Lipschultz, Global Head of Energy and Infrastructure, Kohlberg Kravis Roberts & Co.

"Quite a book and one that should definitely be part of the toolkit of those who are interested in the Infrastructure asset class. Had this comprehensive work been available ten years ago, no doubt, one or two of us certainly would have done things differently. So, let's keep it closely at hand as a guide for the future that helps us deliver even better outcomes for all stakeholders and enables us to further develop the asset class."

Ron Boots, Senior Portfolio Manager - Co head Infrastructure Investments, APG All Pensions Group

About the Author

Dr. rer. pol. Barbara Weber, Lic. oec., MSc is the founding partner of BIBS CAPITAL AG, an investment advisory firm focused on institutional private equity, portfolios, specialised in infrastructure and clean energy, and offering a broad range of strategic and asset allocation services to institutional clients. She has over 12 years of direct and fund investment experience in these areas gained during several years with Dresdner Kleinwort Benson, PolyTechnos and, since 2003, with BIBS CAPITAL AG. She previously worked for the private sector development group of the World Bank in Washington DC on Russia. Barbara lectures at the European Business School and regularly writes for various academic and non-academic journals. Barbara wrote her Ph.D in Economics at Harvard University and University of St. Gallen. She holds an MSc in Business & Operations Research from Warwick University and a post graduate degree in International Relations from Mannheim University.
Prof. Dr.-Ing., Dpil.-Wirtsch.-Ing. Hans Wilhelm Alfen is head of the chair of Construction Economics at the Bauhaus-Universität Weimer in Germany, General Manager