How to solve an identity crisis

Thierry Déau is the kind of man who, when he talks, people tend to listen. He has a calm authority that commands attention. He also has an infectious chuckle: locate yourself somewhere near a meeting room containing Déau and the chances are you won’t have to wait long before you hear it.

Perhaps it is this mixture of leadership quality and ability to see the funny side that made Déau a natural cheerleader for the Long-Term Infrastructure Investors Association (LTIIA), a new organisation that will seek to make the infrastructure asset class better understood in its dealings with governments and regulators.

Leadership was necessary to get the association up and running. Anecdotally, there have been a number of attempts to get infrastructure representative bodies off the ground. It is not that there was ever likely to be a lack of membership – LTIIA had already pulled in 20 or so members at the time of this interview and had ultimate ambitions of attracting up to 200. The problem was more the requirement for someone to take the idea by the scruff of the neck.


A sense of humour may be equally as necessary as leadership. After all, you could either laugh or cry when – at the same time governments in the post-Crisis world were busy telling anyone who would listen to them that long-term infrastructure investment was the cure for ailing economies – Europe’s regulators were at the same time honing the Solvency II Directive which, in its original form, made life a hell of a lot more difficult for institutions wanting to make the kind of commitment to infrastructure that the politicians were pleading for. Déau is much more likely to laugh than cry.

Déau, the founding partner and chief executive officer of Paris-based fund manager Meridiam Infrastructure, is visiting Infrastructure Investor’s offices with the firm’s investor relations director, Matthieu Muzumdar. Muzumdar, who was instrumental in the launch of the LTIIA, says:

“Everyone felt there was a huge knowledge gap with Solvency II where infrastructure was treated as if it were venture capital. There was no intention to catch infrastructure in the net but it was forgotten and overlooked. Real estate got its own categorisation, but no one saw infrastructure as an asset class in its own right.”

Hence, the pressure for infrastructure to better represent itself to the “public side” began to grow. This pressure came not just from private investors but also from governments and regulators who wanted to understand infrastructure better.
The cause was also espoused by the G20 (Group of 20) forum, which has put the need for long-term infrastructure investment near the top of its agenda. The significance of the words “long term” is reflected in the LTIIA’s name. “It was important because it was agreed that ‘long term’ was the way people should be thinking,” says Déau. “It also keeps infrastructure away from being too closely associated with purely financial investment and investment banking.”


With its focus on achieving better understanding, the LTIIA was never intended to be some kind of promotional tool or talking shop. To make this clear, it has set out to achieve progress on key issues that will help to define the asset class.
For example, the EDHEC-Risk Institute – where a research chair was co-founded by Meridiam and UK-based advisory firm Campbell Lutyens – has been set the task of producing a benchmark for the infrastructure asset class, with the initial results expected within the next six to eight months. How the asset class should engage with Environmental, Social and Governance (ESG) issues is another area of study being undertaken.

“The goals [of the LTIIA] are to address specific subjects,” Muzumdar stresses. “It’s about concrete work streams and deliverables, it’s not a ‘grand plan’ but an initiative focused on developing the knowledge base. This will support quality discussions with regulators. For instance, by saying ‘we’re developing a benchmark’ and actually bringing content to the table, it’s a whole different level of interaction.”

Talks about forming an association began to firm up in the first half of this year with would-be founding members being drawn into the discussion. In July, came the public announcement that the association had been created, with Allianz, Development Bank of Japan and Skandia named as founding members. Plenty more have since been signed up (though not yet named) and the association is aiming to have 100 members by the end of 2016. The inaugural meeting will be held imminently.

Meridiam’s task is to shepherd the association through the first 18 months of its life, acting as “General Secretariat” during that period and “donating” its EDHEC research chair to the cause. It will arrange organisational logistics and communication. Further, it will oversee the appointment of a director and a junior member of staff.


However, at the end of those 18 months, Meridiam will step aside – and Déau and Muzumdar are keen to stress that this is essentially a body for limited partners (LPs) that will be run by LPs.

Full members of the LTIIA will be charged an annual membership fee, averaging at €15,000, which is expected to cover costs once between 75 and 100 members have signed up. The initial budget for the organisation is around €1 million per year.
Although general partners (GPs) can also be members, their status would be on an associate basis and subject to the approval of an LP-run board.

“It’s at the discretion of the board to accept new members,” Déau points out. “Data will be shared between members on a confidential basis and, if people are not willing to do that, there’s no point joining. LPs will tend to be happy to do that, but GPs may not be.”

One thing that Déau can be happy about (he may even afford himself another chuckle) is that Meridiam will forever be associated with the first infrastructure association of its type to get up and running. It’s another feather in the cap of a firm used to making headlines – witness for example its recent hiring of former Gordon Bajnai as its new group chief operating officer.

It also represents a step into the light for an asset class that has hitherto been hiding in the corner. “We are making infrastructure a visible asset class,” Déau concludes.