Risk, Return and Cash Flow Characteristics of Infrastructure Fund Investments∗
نویسندگان
چکیده
We analyze the risk, return and cash flow characteristics of infrastructure investments by using a unique dataset of deals done by private-equity-like investment funds. We show that infrastructure deals have a performance that is higher than that of non-infrastructure deals, despite lower default frequencies. However, we do not find that infrastructure deals offer more stable cash flows. Our paper offers some evidence in favour of the hypothesis that higher infrastructure returns could be driven by higher market risk. In fact, these investments appear to be highly levered and their returns are positively correlated to public equity markets, but uncorrelated to GDP growth. Our results also indicate that returns could be influenced by the regulatory framework as well as by defective privatization mechanisms. By contrast, returns are neither linked to inflation nor subject to the ‘money chasing deals’ phenomenon. JEL Classification: G23, G24
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