Benchmarking Infrastructure Project Finance: Objectives, Roadmap, and Recent Progress

Abstract

In this article, the authors examine the objectives, roadmap, and recent progress of academic research with respect to benchmarking the financial performance of privately held infrastructure debt or equity investment, with a focus on the recent development of a new framework to collect data and evaluate such assets. To determine a way forward, the authors start with the reasons that infrastructure investment benchmarks are in demand and list the key questions that such benchmarks should be expected to help answer. Unfortunately, these questions remain very difficult to answer today, for lack of relevant information. Hence, the authors propose a roadmap to develop a definition, valuation, data-collection, and portfolio-construction framework of privately held infrastructure debt and equity cash flows designed to answer these important questions. <b>TOPICS:</b>Other real assets, portfolio construction, security analysis and valuation, fixed income and structured finance