Global Summit: definitions ‘slowing growth of infra debt’

The categorisation of infrastructure is more down to the returns generated, delegates in Berlin heard.

Debates about the definition of what constitutes infrastructure is “slowing the growth of the infrastructure debt market”, according to Alexander Waller, head of infrastructure debt at Whitehelm Capital.

Speaking at Infrastructure Investor’s Global Summit in Berlin, Waller said that definitions of infrastructure “can’t just be driven by [the] sector” an asset falls into. Whitehelm has previously invested in Sydney and Heathrow airports, but would decline to define airports elsewhere as infrastructure, he explained.

“It might be infrastructure at 6 times leverage but not at 9 times leverage,” he added.
He was joined in agreement by Eilidh Mactaggart, head of European infrastructure debt at MetLife Private Capital, who said the definition of infrastructure remains very “elastic”.

“It’s a very hard conversation and a very common conversation and one we’ve been doing for many years,” she said. “If the definition becomes too elastic we’re going to lose out.”

The flexible definition surrounding the asset class “can be helpful”, according to Claire Smith, investment director at Schroders, although conceded it still doesn’t necessarily make classifications an easier task.

“Even with a clear definition of infrastructure, it’s still sometimes not ultimately clear which bucket an asset falls into,” she said.