Pension Scheme Investment in Infrastructure and Real Estate

Dates:

• 18 – 22 November 2024 - London (£2,650)
• 19 - 23 May 2025 - Kigali (£2,450)
• 24 - 28 November 2025 - Dubai (£2,850)

Course Outline

The long-term nature of both infrastructure assets, including communications, ports and amenities, and commercial and residential real estate makes investment in these alternative asset classes attractive to pension schemes.

However, pension investors need to exercise caution when considering allocations to these asset classes. The robustness of projected cash flow streams generated by these investments through the business cycle needs to be carefully analysed since it is these cash flows, typically underpinned by contractual arrangements, that actually generate income, and consequently returns, to investor capital.

The programme provides delegates with key insights into the Project Finance techniques underlying infrastructure investment and assesses the optimal position within the capital structure of project financing special purpose vehicles (SPV) to generate acceptable risk-adjusted returns for pension schemes’ risk appetite. Delegates will discuss the suitability of different types of infrastructure assets for pension scheme investment, and draw the careful distinction between these and “public goods” perhaps more appropriately funded by government taxation and other sources.

The principal types of commercial and residential real estate are covered in detail by the programme including construction of new properties as well as the valuation analysis and risk assessment underpinning responsible investment by pension schemes in existing assets.

Course Objectives: 

On completion, you will be able to:

• Appreciate the increasingly important role played by private equity in investment
• Understand the fundamental drivers behind the evolution of the market
• Analyse the risk/return profile of private equity investment
• Identify the principal actors in infrastructure project finance transactions
• Appreciate the key factor of liquidity in private assets vis-à-vis mainstream securities
• Understand the important differences between infrastructure and public goods

Key Topics

• The nature and risk/return profile of private asset investment
• Rationales for pension scheme allocation to private equity and infrastructure
• Pitfalls in private asset investment and the key role of effective due diligence
• Realistic liquidity analysis in public and private asset markets
• Evolution of private investments and key exit strategies
• Project finance structures and participants

This is week two of The Pension Scheme Investment Toolkit.