Risk, Return And Cash Flow Characteristics Of Infrastructure Fund Investments
The authors show that infrastructure deals have a performance that is higher than that of no infrastructure deals, despite lower default frequencies. However, they do not find that infrastructure deals offer more stable cash flows. This paper offers some evidence in favor 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.