INFRASTRUCTURE
BY: MAHA KHAN PHILLIPS
PROFILES BY: STUART NEWMAN
ANDREW JOYNER
I
nfrastructure has become one of the
fastest growing asset classes in the
world. Th e number of specialist
infrastructure funds focused on Europe
Title: Fund Analyst
grew from less than 10 in January 2003
Current employer: Hines Europe
to over 40 by July 2007. Th e value of
Previous employers: European acquisitions by infrastructure
Oxford Properties Group
funds has grown from a value of less than
University:
£1 billion in 2003 to over £22 billion in
Queen’s University, Canada
2006. Infrastructure has also been closely
Degrees: Bachelors in Economics
correlated with steadily increasing deal
Professional qualifi cations:
CFA Level II candidate
multiples which have grown from an
average of 9.78 in 2003 to 19.58 by
2006, according to a survey by Deloitte
What attracted you to this career path?
& Touche.
I was attracted to a career in alternative asset management,
Th e asset class is popular in defensive
specifi cally real estate and infrastructure as they blend my
markets, because it tends to have stable,
interests in fi nance, economics, engineering, architecture and
relatively predictable income streams with a
geography.
long life-span. It is also problematic
however, in that it is diffi cult to defi ne.
What are the major challenges you face in your position?
Infrastructure covers everything from
The current market situation has made it extremely diffi cult to
running a hospital, to building new power
formulate indicative, stabilised revenue and expense assumptions.
stations where construction risk is a big
Emerging market demand and infl ation are affecting input
issue. Th e number of players in the market
material prices, the cost of labour and the price of non-renewable
is also diverse. Investment banks, private
resources. Energy costs are generally increasing and the
equity houses, property fi rms and asset
stabilised dimension of price increases remains unclear. managers are all providing solutions, with
each bringing a diff erent skill set through
Are there certain skills you would consider useful for your job? listed and unlisted vehicles. For many
Accounting and valuation skills are important, also, understanding managers, infrastructure has to have a social
equity and debt structures and the impact of leverage. Knowledge benefi t to be considered part of the asset
of construction costs, structural quality, infrastructure life-span class. It has to aid a community. Others
and capital programs are also key, as is a diligent understanding
break the asset class into economic or
of assumption inputs.
concession based infrastructure – which
supports commerce and typically charges a
How do you think the role you’re in now will change over time?
fee – and social infrastructure, which
Three trends will emerge: An increased focus on environmental
consists of social services facilities such as
stewardship, further corporate transparency and an increased
schools and hospitals.
proportion of fees in the form of long term incentives that are tied
to realised long term value creation.
OPPORTUNITIES
Because of its diff erent origins,
Do you have advice for someone intending to pursue the same
infrastructure off ers a vast array of career
career path?
opportunities. “If you go through the whole
Pursue a career in a sector for which you have a fundamental
value chain around infrastructure, it goes
interest in. An acute interest in the underlying asset class will
from people with legal structuring
result in analysts who are perpetual students who actively develop
backgrounds, to the products themselves
both their macro and micro level knowledge.
and the funds they’re actually investing in.
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