Infrastructure Investing: Managing Risks & Rewards for Pensions, Insurance Companies & Endowments(Wiley Finance)

Invaluable information regarding one of the biggest worldwide growth areas in investing-infrastructure assets Infrastructure investing is about to explode on the worldwide scene. The fact is that real money will need to be spent on real projects-which will present real opportunities for stable, long-term returns. But infrastructure assets have unique characteristics and the investments and funds that will likely rise up must be suitably structured to serve investor needs. Author Rajeev Sawant has been analyzing infrastructure investments, funds, and project financing programs for nearly five years, and with this book, he presents information that will be invaluable to lenders, pension funds, insurance companies, investment funds, rating agencies, and even governments. Presents comprehensive data analysis on infrastructure cases worldwide Analyzes the opportunities as well as the pitfalls of infrastructure investing Focuses on the needs of pensions, insurance companies, and endowments interested in infrastructure investing For the next decade, worldwide economic growth and increased employment-as well as investment returns-will come from infrastructure projects. This book will help you understand today's dynamic infrastructure asset class and quickly get you up to speed on the unique risks and rewards associated with it.

Table of Contents:
Preface xi Acknowledgments xvii Chapter 1 Infrastructure Demand and Investment Funds 1 An Overview of Infrastructure Demand 2 Availability of Funds 19 Conclusion 26 Chapter 2 Infrastructure Asset Characteristics 27 Defining Asset Classes 28 Portfolio Perspective on Asset Classification 29 Large Up-front Investments 32 Strong Cash Flows 34 Stable Cash Flows 36 Long Life 38 Irreversible Investments 38 Location Specificity 39 Growth Options 39 Value under Default 44 Conclusion 47 Chapter 3 Equity Infrastructure Indexes 49 Infrastructure Investment Options 49 Equity Infrastructure Indexes 51 Macquarie Global Infrastructure Index 54 S&P Global Infrastructure Index 58 CSFB Emerging Markets Infrastructure Index 59 Infrastructure Equity Indexes Correlations 63 Efficient Frontier 65 Conclusion 69 Chapter 4 Debt versus Equity Mode of Investment 71 Theories of Capital Structure 71 Pecking Order Theory 74 Free Cash Flow Theory 76 Trade-off Theory of Capital Structure 78 Governance and Capital Structure 81 Options Approach 82 Private Equity Model of Investing 86 Conclusion 94 Chapter 5 Infrastructure and the Threat of Holdup 95 Transaction Cost Economics 95 Solutions for the Holdup Problem 102 Conclusion 113 Chapter 6 Infrastructure Assets and Political Risk 115 Political Risk Typology 115 Sovereign Holdup 120 Types of Risk 124 Hedging Sovereign Holdup 130 Risk Mitigation Strategies 134 Conclusion 142 Chapter 7 Project Finance and Infrastructure 145 Project Finance Structure 146 Project Finance versus Corporate Finance 147 Ras Laffan Revisited 156 Project Risk Analysis 161 Credit Rating Agencies 165 Using the Project Finance Structure 169 Role of Government 172 Conclusion 175 Chapter 8 Infrastructure Asset Valuation and Bond Returns 177 An Overview of Infrastructure Valuation Theory 178 Basel II and Infrastructure Lending 187 Infrastructure Bond Returns 199 Conclusion 208 Chapter 9 Case Studies 211 Case Study 1: Aguas Argentinas S.A. 211 Case Study 2: Dabhol Power Company 223 Conclusion 230 Conclusion 233 Notes 237 About the Author 253 Index 255

About the Author :
RAJEEV J. SAWANT is a Research Fellow at the Center for Emerging Market Enterprises at the Fletcher School, Tufts University. Prior to this, heconsulted for JSA Partners (an A.T. Kearney spin-off) in international strategic alliances in aerospace and defense. Sawant is a member of the Academy ofManagement and the Financial Management Association, is an Inlaks Shivdasani Foundation scholar, and has served as Aide de Camp to the President of India. He holds a PhD inbusiness strategy and international management.