MAS in joint bid to set up new investment database

The Monetary Authority of Singapore has partnered with French business school EDHEC and French investment bank Natixis to create the world's largest infrastructure investment database.

A 10-man research unit, based here, has been set up with a five-year budget of $14 million to create performance benchmarks for long-term infrastructure debt and equity instruments.

The benchmarking will help institutional investors such as insurers and pension funds understand infrastructure as an asset class, and so take a step towards closing the world's trillion-dollar funding gap for infrastructure projects, said Dr Frederic Blanc-Brude, director of EDHECinfra, its research unit.

"When you measure risk better, you can make it more palatable to invest in infrastructure, especially if you can use the debt of all these projects to build products, structure products, that are sold in Singapore; like a collateralised debt obligation basically, but a good one; one that's full of assets that are well-understood, well-documented, with a risk profile that is well-measured."

EDHECinfra is on track to publish the first-of-its-kind benchmark at the end of the year, one which represents available investments in Organisation for Economic Cooperation and Development member nations.

"As far as I know, no one else is trying to do this, maybe because it's too crazy. It is difficult to benchmark investment returns because there is no traded data," said Dr Blanc-Brude, so a huge part of EDHECinfra's role is to acquire high-quality data from asset owners, banks and fund managers.

With the data, his team can compute performance measures to build the reference portfolio.

So far, EDHECinfra has collected information on 500 investment entities going back 25 years.

"Once we reach about 2,000 entities each on both the debt and equity side, we will have a good grasp of the global situation," said Dr Blanc-Brude.

Asian infrastructure projects will make up about 10 per cent of the total sample.

A version of this article appeared in the print edition of The Straits Times on February 25, 2016, with the headline 'MAS in joint bid to set up new investment database'. Print Edition | Subscribe