The Pipeline Global Online Summit Special: Day 3

Welcome to The Pipeline Global Summit Online Special, featuring coverage of our flagship event this week for our valued subscribers and attendees. Here's what we learned on Day 3.

Watch it

Did a man collect that data?
OK, Caroline Criado Perez’s presentation on the ‘gender data gap’ is actually from Day 2 of our Global Summit Online – not Day 3. But we couldn’t get the session video ready in time for yesterday’s Pipeline, and we really want you to watch it.

Essentially, Criado Perez warned that the data about women’s place in society are historically misleading. That means the research, studies and surveys conducted over the years have been skewed to represent a male-dominated society – and it’s time for that to change.

From employment to transport, Criado Perez said that we need to completely reconsider the way we gather the information on which we base decisions if we are to help bring about a more equitable world.

Watch the full interview here.

Grapevine

“There was a guy [at Redexis] nicknamed Messi, because he would score like no tomorrow, converting people to gas”

Goldman Sachs‘ Matteo Botto Poala recalled the prowess of a former portfolio company employee when it came to convincing customers to switch to natural gas

Talking points

Big data is your ticket to big value
Big data holds big promise. However, Matteo Botto Poala, a managing director in Goldman Sachs’ infrastructure team, said the industry is probably more advanced in using data to extract value from portfolio companies than it is at using it to improve investment sourcing and decisions. He noted some of his own firm’s initiatives to advance the latter through knowledge-sharing across its teams.

Ross Israel, co-founder and head of global infrastructure at QIC, commented: “We found a number of areas where it’s been enormously valuable.” One of the lessons he learned in the process was the need to find “champions and designated key people” within portfolio companies to recognise the value of big data. Poala agreed that managing resistance within an organisation “is a big challenge that shouldn’t be underestimated”.

It’s not all about collecting data, Israel warned. Convincing legislators, consumers and businesses that data will be handled well is “an area where we’ve got to be responsible and engage to find a good, soft landing that benefits all stakeholders”.

Sound advice.

The only thing infra has to fear is… infra itself
Faced with the threats of a pandemic, lockdowns and a recession, it might be assumed that, notwithstanding the resilience of the asset class, infrastructure investors still have much to contemplate when it comes to assessing risk.

However, when asked by Bruno Candès, partner at InfraVia Capital Partners, what the biggest short-term risk to the asset class was, Serkan Bahceci, partner at Arjun Infrastructure Partners, preferred to look a bit closer to home.

“The biggest risk is us,” he warned conference attendees. “There is a lot of liquidity in the market and there will be a lot of pressure on infrastructure asset pricing. We have to keep our discipline. That’s where the danger is.”

Potential vendors should consider themselves warned that at least one buyer won’t be paying top dollar for their infrastructure assets.

Keep your eyes on the exit
When collaborating on investments, managers should “always have an off-ramp” for their investor partners, explained Lincoln Webb, global head of infrastructure and renewable resources at British Columbia Investment Management Corporation.

“Inevitably, this will come up,” he said during a panel covering issues that arise with co-operative investment opportunities. “You need to think about [exits] when setting up these structures, about how investors can step away if needed and new investors [can] be brought in.”

Isela Bahena, a managing director in the private infrastructure group at Nuveen, said that ”while exits are bound to happen for any number of reasons, one way to ensure a venture lasts as long as possible is to ensure long-lasting alignment of interests”.

She added that negotiating fees to induce partners to stay invested is one way to “make sure everyone is bought in to moving the business forward”.

Horses for courses
Harry Seekings, head of infrastructure at InfraRed Capital Partners, marvelled on Day 2 at how, a decade on, “the industry is still trying to define itself”. Well, he would have cracked a smile at one of our Day 3 panels, where attendees debated how the definition of infrastructure is constantly changing.

In London circa 1850, a conveniently positioned downtown horse stable might have presented an attractive investment case for a true infrastructure pioneer, according to Andrew Claerhout, a partner at Searchlight Capital Partners. Now, those returns would surely be compromised by double-decker buses, the Tube and Heathrow Airport.

The point Claerhout underscored was that people should be “investing in assets that satisfy the attributes of infrastructure at the time of investing” as well as when the return on capital is inked, which is typically within five to 10 years.

That certainly helps frame the ‘what-is-infrastructure’ debate, but it also means keeping a sharp eye on changing trends. As Hamish Mackenzie, head of infrastructure at DWS, highlighted, time running out on an asset’s viability amounts to stranded asset risk. “We have to look at what the ultimate buyer is buying now and in the future,” he explained.

Today’s highlights

Here are three sessions you won’t want to miss (times are all BST):

  • 10.30-11.15 Energy investments in the 2020s Panel discussion featuring Conquest’s Frederic Palanque, Megawatt-X’s Laurent Segalen and the Global Infrastructure Investor Association’s Lawrence Slade
  • 12.30-13.15 Smart Cities 2.0: The Future of Urban Living Ayesha Kanna, co-founder and CEO of ADDO AI, gives a keynote presentation on the smart cities of the future
  • 15.45-16.30 Changing investment sentiment towards direct and co-investments in infrastructure Panel discussion featuring BCI’s Jerry Divoky, Northwestern Mutual Capital’s Howard Stern, Mark Weisdorf Associates’ Mark Weisdorf, Allianz Capital Partners’ Yves Meyer-Bulow and HSBC Global Asset Management’s Dominik von Scheven

For the full agenda, go to our Global Summit Online homepage.


Today’s letter was prepared by Bruno AlvesZak BentleyKalliope Gourntis and Jordan Stutts also contributed

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