In advance of the event, Delano spoke with Alessia Lorenti, head of business development at Edmond de Rothschild. She speaks on the “Putting capital to work in infrastructure” panel, Wednesday 27 November at 3:50pm.
Aaron Grunwald: What do you want the audience to get most from the “Putting capital to work in infrastructure” panel?
Alessia Lorenti: The objective is to explain how the private capital investment in the infrastructure domain has emerged and developed over time. Sharing insights and practical experience on investors’ expectations and how capital is deployed in the development and maintenance of infrastructure, the geographies and segments in which private capital is key today for the development or maintenance of infrastructure. Demystifying how deals are sourced and the life cycle of infrastructure investments.
How are infrastructure funds different from other types of alternative funds?
Infrastructure funds are about generating long term impact and value creation. For instance we are increasingly seeing a focus on renewable energy investment.
The life cycle of infrastructure funds is generally longer than other private capital asset classes, such as private equity, real estate or related private debt, particularly whereby the focus is on infrastructure development projects. We are often looking at funds which have a 15 year term. This implies that investors need to understand that their capital commitment and lock-up period in the fund is long-term, this is key in managing their portfolio allocation in respect of their expected returns and future liquidity needs.
What is missing from the European infrastructure fund landscape, and how can that gap be bridged?
Today there is a gap between the retail investors’ wish to make meaningful long-term investments, for instance in renewable energy infrastructure, and their ability to access such asset class. The European Long-Term Investment Fund wrapper ticks the boxes in part, but is not extensively utilised today. Hence the key questions are whether the ELTIF regime, as currently foreseen, is best suited to this investment strategy and the retail distribution framework, if the existing ELTIF framework should undergo certain adaptations, or if a retail infrastructure fund regime should be implemented.
Aside from your own talk at the Alfi event, which speech or panel are you most looking forward to hearing, and why?
I am particularly interested in hearing industry players share their views of ESG and PE, how they are factoring in ESG criteria today in their investment criteria, during the investment selection process and thereafter, during the investment lifecycle. I am keen to understand whether they consider that there is a minimum ESG criteria to be met at inception of the investment, a target to be achieved at realisation of such investment, and how PE houses accompany their portfolio companies in such transformation. Finally, it will be interesting to hear how ESG criteria is factored in the valuation of the portfolio companies.