Analysis of infrastructure debt under FTK, Solvency II and Basel III

Regulatory Insight

Is infrastructure debt an attractive asset class for institutional investors from a regulatory perspective? To answer this question, we analyzed capital requirements for investors who invest in infrastructure loans and who are subject to different regulations. Dutch pension funds are subject to FTK, European insurance companies are subject to Solvency II, and banks face Basel III regulations.

Written by David van Bragt, Senior Consultant Investment Solutions and Rémi Lamaud, Head of Regulation and ALM at La Banque Postale Asset Management.

We provide insight into the trade-off between required capital and expected return for infrastructure debt. Infrastructure relates to real assets: equipment, facilities and networks providing essential public services. As an investment, infrastructure generates predictable long-term contracted or regulated revenues. The rise of infrastructure debt as an asset class is supported by structural trends like the call by governments on institutional investors to undertake infrastructure projects.





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