Do investors value cash flow stability of listed infrastructure funds?

Arbeitspapier

I analyze cash flow characteristics of listed infrastructure investment companies and funds and compare this unique infrastructure sample with a non-infrastructure reference group. I confirm that infrastructure investment provide more stable cash flows than non-infrastructure investments. However, I do not find that investors positively value this cash flow stability. Instead, more volatile cash flows are valued with a premium. On the other hand, earnings management proxied by accrual volatility is valued with a discount. My paper offers evidence that higher infrastructure investments in general are valued with a positive 'infrastructure premium' that is not driven by more stable cash flows. I find additional indications that transparent financial and governance structures as well as regulatory risk play a significant role for the valuation of infrastructure investment companies and funds.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2012-01

Classification and Topics

• Classification: Wirtschaft ; Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors ; Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
• Subject: infrastructure funds ; cash flow volatility

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bitsch, Florian
• Event: Veröffentlichung
• (who): Technische Universität München, Center for Entrepreneurial and Financial Studies (CEFS)
• (where): München
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/55145
• Last update: 10.03.2025, 11:41 AM CET