Infrastructures as an Alternative Asset Class for Institutional Investors

Stefano Gatti (Department of Finance) will be the only representative of a university to participate in the Financial Stability Board (FSB) Workshop on Identifying the Effects of Financial Regulatory Factors on the Provision of Long-Term Finance (Basel, 27-28 June 2013).

Aimed at identifying specific financial regulatory factors impeding the provision of long-term finance that may warrant a response at the international level, without compromising global financial stability objectives, the workshop will provide insights to the FSB and the G20 Study Group on the financing of long-term investment. The best part of the 75 participants are representatives of central banks, international and government organizations and financial institutions.

Professor Gatti's presentation will focus on infrastructures as an interesting alternative asset class for institutional investors. Infrastructures are typically long term assets, with very long useful economic lives and they are not always subject to technological obsolescence. The demand for the services that infrastructures provide is strongly non elastic. Given the characteristics of key public services, the demand is often not sensitive to price changes. As a result, demand is not volatile and can be predicted with a reasonable level of risk. Infrastructures provide a stable and predictable operating cash flow, often inflation-linked, and display low correlation with other traditional asset classes.