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PrEQIn Infrastructure Quarterly Index: Infrastructure vs. All Private Equity – February 2015

by Madeleine Stretton

  • 27 Feb 2015
  • PE
  • INF

The PrEQIn Infrastructure Index was developed by Preqin as an additional method of measuring infrastructure performance across all vintage years. It captures, in index form, the average returns earned by investors from their infrastructure portfolios, based on the actual amount of capital invested in infrastructure partnerships. This method enables the comparison of infrastructure funds with other private equity strategies. The PrEQIn Infrastructure Index and the PrEQIn All Private Equity Index are calculated on a quarterly basis using data from Preqin’s Infrastructure Online and Performance Analyst online services.  

By rebasing the index to 100 as of 31 December 2007, we can examine the performance of infrastructure funds in comparison to private equity in the period following the financial crisis. While it can be seen that private equity suffers in the period directly after the crisis, infrastructure produces increasing returns from Q4 2007 through to Q4 2008. This could be seen as a reflection of infrastructure’s low correlation with other asset classes, which can be a positive attribute in times of financial uncertainty. Infrastructure produced its lowest returns in Q3 2009 with an index of 93.7, but has increased each quarter since this date.

Both infrastructure and private equity returns have increased each quarter since 2009. As of Q2 2014, both were producing their highest index returns, 161.0 and 142.8 respectively. Infrastructure has continued to outperform private equity on a quarterly basis, proving that it can be a valuable addition to an investor’s portfolio. 

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