The Rise of "Fake Infra"

In this post we revisit the phenomena of “Fake infra”. The term first appeared in a position paper by EDHEC Infrastructure Institute: The Rise of “Fake Infra” (Amenc, N, Blanc-Brude, F, Chreng, A and Tran, C, 2017), EDHECinfra Publications. The paper examines the rise of listed infrastructure products. An ill-defined series of financial products aimed for retail investors but that has increasingly been introduced/marketed to institutional investors with the promise of performance attributes associated with unlisted infrastructure. However, these products do not display the performance characteristics of private infrastructure asset but are merely (in the best case) a mirroring of the broad stock market indices otherwise leaving investors exposed “to age-old stock picking strategies or a combination of betas they already had access to” (Amenc et al. , 2017).

Sogne Strategies was founded to help promote attractive private (unlisted) infrastructure investment opportunities around the world to Nordic institutional investors. Strategies that requires investors to exercise their long-term investing capabilities to achieve stable returns, increase portfolio efficiency and at the same time add significant value to society and the wider economy.

We agree with the authors that without proper understanding, scrutiny and oversight; listed infrastructure products threatens to undermine the reputation of infrastructure as an attractive and important asset class.