What infrastructure assets are institutional investors interested in? Thomas Foucoin: Fundamentally, we insure more than £30bn of defined benefit pension liabilities, with a significant market opportunity, and we need to source long-term, stable and, where possible, inflation-linked, cashflows to match the pen- sions of our policyholders. That is why we invest in infrastruc- ture debt.


There is no specific sector we target, but there are things we like. We have invested significantly over the years in social infrastructure. A good example would be student accommo- dation, which presents an opportunity for us to invest our policyholders’ pensions in projects that benefit future generations. We also invest in assets which support the energy transition. Renewable energy has been an important part of our pipeline in the last few years. In particular, we have invested in offshore wind farms in the UK and solar projects across the continent. Lastly, we finance assets which are critically needed to modern- ise the economy and are useful every day for local communi- ties. One such transaction we financed was a fleet of rolling stock, including several electric trains, connecting Birming- ham to other cities and towns in the Midlands. Lewis Vanstone: We make debt and equity investments looking for contracted, inflation-linked cashflows for our members. We have the flexibility to make unlevered or levered equity invest- ments where we see explicit inflation-linked contracts. That is through our Long-term Income Fund, which has around £2bn of committed capital. We also have a growth infrastructure pot of some £500m which is aimed at investing in assets earlier in their lifecycle – at the greenfield, development or construction stage – and the intention is to keep them within the scheme long term. We are sector agnostic, investing across all infrastructure sub- sectors. Recent investments have been energy transition focused, including wind, biomass, smart metering, waste and battery storage. Katya Romashkan: We invest across various sub-sectors, mainly energy, waste, transport, social and regulated utilities. We have done quite a few transactions in the energy transition space. We have bought into wind farms, but at the same time backed a battery storage developer, which is an energy transi- tion story rather than one of pure renewables. We are an equity investor. Although we can invest across the capital structure, low interest rates in the past 10 years meant that the risk/return profile was not attractive enough for us to invest in debt. Obviously, things are changing. Our assets need to have certain characteristics. We are a core- plus infrastructure


investor, so contracted inflation-linked


cashflows, long-term durations as well as having governance and control, which for equity investors is important.


8 December – January 2023 portfolio institutional roundtable: Infrastructure Infrastructure brings a natural


diversification to portfolios. Jean-Francis Dusch, Edmond de Rothschild Asset Management


What role does infrastructure play in institutional portfolios? Jean-Francis


Dusch: Investing in infrastructure is impact finance, to a certain degree, as institutions are conviction, ESG and regulation driven.


ESG integration is important, especially in light of SFDR [Sus- tainable Finance Disclosure Regulation] and Europe’s energy transition bet. Alongside long-term matching assets and recur- ing and predictable revenues, infrastructure brings a natural diversification to portfolios.


The energy transition is broad. It is traditional renewable energy, but also second-generation sectors such as battery stor- age, hydrogen and hydroelectricity. It also expands to green mobility and social infrastructure with energy efficiencies for the more traditional infrastructure. Decarbonisation of utilities is also a key component of the energy transition. It is also about jurisdictions and regulation. Our investor base was in Europe, but we are becoming more global and there are


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