Credit Suisse's Asset Management Thought Leadership Program: Can Infrastructure Investing Enhance Portfolio Efficiency?

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Jun 08, 2010, 02:29 ET

NEW YORK, June 8 /PRNewswire-FirstCall/ -- Credit Suisse's Asset Management division today announced the release of a new white paper entitled "Can Infrastructure Investing Enhance Portfolio Efficiency?" Published as part of the Bank's Asset Management Thought Leadership Program, the paper provides an in-depth look at infrastructure as an investment tool and analyzes what roles the asset class might play in institutional portfolios.

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According to David Russ, Head of Investment Strategies and Solutions in Asset Management at Credit Suisse, the opportunity set for infrastructure as an asset class is important. "We believe that some exposure to infrastructure—within the context of a diversified portfolio—can help address several challenges currently faced by institutional investors, including potential funding gaps and the negative impact of potentially rising inflation on portfolios." Here's why:

Infrastructure has low correlations to many commonly held asset classes—including US equities, global bonds, Treasury Inflation-Protected Securities (TIPS), commodities, private equity and hedge funds. As such, the asset class might help improve a portfolio's Sharpe ratio when deployed strategically.
The long-term nature of infrastructure investments can help mitigate duration risk for pension portfolios.
Default rates in infrastructure investments are relatively low because captive customer bases and generally stable demand for certain types of infrastructure tend to provide comparatively steadier cash flow streams than more economically sensitive businesses and sectors.
Infrastructure is a diverse asset class in and of itself, presenting a range of risk/return profiles and characteristics.

The paper also addresses the characteristics of infrastructure as an asset class and examines the many types of investments in the space and how they differ in scope and potential uses in portfolios. In addition, the white paper provides "real-life" examples of the various roles that infrastructure can play in institutional portfolios.

Credit Suisse AG

Credit Suisse AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to here as 'Credit Suisse'). As an integrated bank, Credit Suisse offers clients its combined expertise in the areas of private banking, investment banking and asset management. Credit Suisse provides advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as to retail clients in Switzerland. Credit Suisse is headquartered in Zurich and operates in over 50 countries worldwide. The group employs approximately 48,300 people. The registered shares (CSGN) of Credit Suisse's parent company, Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.

Asset Management

In its Asset Management business, Credit Suisse offers products across a broad spectrum of investment classes, including hedge funds, credit, index, real estate, commodities and private equity products, as well as multi-asset class solutions, which include equities and fixed income products. Credit Suisse's Asset Management business manages portfolios, mutual funds and other investment vehicles for a broad spectrum of clients ranging from governments, institutions and corporations to private individuals. With offices focused on asset management in 19 countries, Credit Suisse's Asset Management business is operated as a globally integrated network to deliver the bank's best investment ideas and capabilities to clients around the world.

All businesses of Credit Suisse are subject to distinct regulatory requirements; certain products and services may not be available in all jurisdictions or to all client types.

SOURCE Credit Suisse AG