Infrastructure as an Asset Class
Investment Strategies, Project Finance and PPP
By: Barbara Weber, Hans Wilhelm Alfen
About This Book
The market for infrastructure is vast and, contrary to popular belief, the range of potential infrastructure investments is extremely broad. An investor who does not have a sufficient overview and insight into the infrastructure market or an awareness of the suitable investment opportunities and the risks they entail, will find it difficult to select the right investments. This book is a comprehensive guide to the subject, bringing together the topics of infrastructure investments, project finance and public private partnerships (PPPs), equipping investors with the necessary theoretical knowledge and background information as well as practical examples in order to further their understanding of the key aspects of infrastructure investments. It answers questions such as: How is infrastructure defined? Which sectors are classified as infrastructure, how are they categorised, and what are the differences between them? Is infrastructure an asset class in its own right? If so, what are its characteristics? What are the fundamental options for investing in infrastructure? What is a good starting point for institutional investors? How should infrastructure funds be evaluated? What risks do they entail and how can these risks be identified and assessed? How should they be structured in order to best allocate these risks? The book discusses the differing objectives and expectations of the parties involved and the conditions required by public principals and investors in order to enable these groups to overcome the ?language problems? they largely encounter. In addition to background knowledge and information on the latest developments in the individual subject areas, the book also explains the methodology of project finance in detail, both for traditional project finance and in the PPP context, establishing the key differences to other forms of financing, guiding readers through the various phases of project analysis on a step-by-step basis using practical examples. Well structured infrastructure investments can serve to improve the risk-return profile of an investor?s overall portfolio on account of their long term and their low level of correlation with traditional asset classes. This book will assist investors in their understanding of infrastructure investments, leading to a better informed portfolio. "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
AI Overview
The book "Infrastructure as an Asset Class: Investment Strategy, Sustainability, Project Finance and PPP" by Barbara Weber and Hans Wilhelm Alfen provides a comprehensive guide to the infrastructure investment market. Here is a detailed overview of the key themes, plot summary, and critical reception:
Key Themes
Comprehensive Coverage: The book offers in-depth expert insight into the infrastructure investment market, covering various sectors, sustainability aspects, and financing instruments.
Infrastructure Definition and Classification: It explores how infrastructure is defined, which sectors are classified as infrastructure, and the differences between them.
Investment Strategy: The book discusses the fundamental options for investing in infrastructure, including project finance and public-private partnerships (PPPs).
Sustainability and Risk Analysis: It emphasizes the importance of sustainability in infrastructure investments and provides step-by-step guidance on risk analyses, benchmarking, and project financing structures.
Renewable Energy and Social Infrastructure: New chapters delve into renewable energy generation, electricity and gas transmission and distribution, district energy systems, and social infrastructure.
Risk Profile and Return: The risk profile of an asset varies depending on the stage, sector, and country, but the individual structure is crucial in determining the risk/return profile.
Plot Summary
The book is structured to equip investors with the necessary theoretical knowledge and background information on infrastructure investments. It addresses various questions such as:
- How is infrastructure defined?
- Which sectors are classified as infrastructure?
- What are the differences between these sectors?
- Is infrastructure an asset class in its own right?
- What are its characteristics?
- What are the fundamental options for investing in infrastructure?
- How should infrastructure funds be evaluated?
- What risks do they entail, and how can these risks be identified and assessed?
- How should they be structured to best allocate these risks?
The book also explains the methodology of project finance in detail, both for traditional project finance and in the PPP context, highlighting the key differences from other forms of financing. It guides readers through the various phases of project analysis using practical examples.
Critical Reception
The book has been well-received for its comprehensive coverage and in-depth expert insight. It is considered a leading infrastructure investment guide, fully updated to reflect the current state of the global infrastructure market. The second edition has been praised for its step-by-step guidance and practical examples, making it a valuable resource for both new and experienced investors.
On Goodreads, the book is described as a comprehensive guide to the subject, bringing together topics of infrastructure investments, project finance, and public-private partnerships. It is noted for its ability to equip investors with the necessary theoretical knowledge and practical examples to further their understanding of key aspects of infrastructure investments.
Additional Insights
The book's critical reception also highlights its relevance in the post-financial crisis market. Section 10 of the book discusses new developments in the market after the financial crisis and revisits the question of infrastructure as an asset class. The economic characteristics of infrastructure investments, such as high barriers to entry, economies of scale, inelastic demand for services, low operating costs, and long duration, are emphasized as attractive financial characteristics.
Overall, "Infrastructure as an Asset Class" by Barbara Weber and Hans Wilhelm Alfen is a seminal work in the field of infrastructure investments, providing a robust framework for understanding and navigating the complex and rewarding market of infrastructure assets.