Re-intermediating Investment Management

Monk, Ashby H. B.; Sharma, Rajiv; Sinclair, Duncan L.

doi:10.11126/stanford/9781503601789.003.0003

Cited by 5 publications

(4 citation statements)

References 38 publications

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“…9. See Monk et al (2018) and Christophers (2023) for discussion of how closed-end, third-party funds seek to extract short-term gains from infrastructure assets or utilities.…”

Section: Discussionmentioning

confidence: 99%

The UK Infrastructure Bank and the financialization of public infrastructures amidst nationalist neoliberalism

McArthur

2023

Competition & Change

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Literature on the financialisation of infrastructure gives limited attention to public banks. Since public banks are key state institutions to enable and shape financialisation, more research is needed to show how they mediate financialisation processes amidst evolving social, political and economic pressures. To address the gap in existing literature, this article develops a case study on the UK Infrastructure Bank to examine how the bank enables financialisation whilst maintaining credibility with the United Kingdom's neoliberal-nationalist regime. The findings show that the UKIB is a centralised, technocratic institution which deploys de-risking interventions to attract private investment, including guarantees, equity shares and debt financing. Yet, these interventions enable projects which offer limited public value, such as debt financing to fuel over-investment in fibre broadband markets, or equity investments in infrastructure funds which perpetuate the dominance of short-term, extractive investment logics. To maintain credibility with the neoliberal-nationalist regime, the UKIB's governance strengthens the central government's power over its activities, allowing it to shape the post-Brexit policy agenda and target investment to specific constituencies. While the UKIB boosts the profitability of infrastructure assets for private investors, it also exposes regions to extractive logics that undermine the potential public benefits. The findings show how public banks can be used to coordinate and bolster support for financialisation, yet, the use of de-risking interventions to catalyse financialisation is often at odds with generating long-term public value.

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“…9. See Monk et al (2018) and Christophers (2023) for discussion of how closed-end, third-party funds seek to extract short-term gains from infrastructure assets or utilities.…”

Section: Discussionmentioning

confidence: 99%

The UK Infrastructure Bank and the financialization of public infrastructures amidst nationalist neoliberalism

McArthur

2023

Competition & Change

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“…Yet, the proliferation of infrastructure funds does not reflect widespread satisfaction amongst institutional investors. Monk et al (2018) show how principal-agent problems arise when institutional investors outsource investment decisions to third-party asset managers: managers of private equity-style funds are incentivized to front-load their returns, leading to extractive practices and financial engineering, which is at odds with pension funds' desire for stable, long-term returns and responsible asset management (Christophers, 2023).…”

Section: Background: Development Of the Infrastructure Asset Classmentioning

confidence: 99%

Infrastructure debt funds and the assetization of public infrastructures

McArthur

2023

Environ Plan A

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Infrastructure has grown rapidly as an alternative asset class, yet many of the complex processes that transform public infrastructures into lucrative financial assets are poorly understood. This article examines investments by an infrastructure debt fund, to show how financial innovations expand and diversify the infrastructure asset class by finding new ways to generate financial returns from infrastructures. Infrastructure debt is an emerging sector of the infrastructure asset class, where private debt funds create assets that generate returns by extending loans or bond financing to physical infrastructures. The analysis uses assetization as a conceptual framework to scrutinise the construction of financial assets, centring the role of rent generation and extraction to show how infrastructure debt funds create financial value. By bringing the performative work of asset construction into dialogue with the political-economic forces enabling rent extraction, the analysis augments existing literature on financialized infrastructures. The findings show how infrastructure debt assets are predicated on multiple rounds of assetization: initially, the essential nature of infrastructure services is exploited to generate and extract monopoly rents as long-term revenue streams, and in turn, debt funds extend claims on these revenue streams to extract rents through interest payments. In this way, infrastructure debt extends the infrastructure asset class and provides a new route to extract rents, raising concerns over the potential of these investment practices to contribute to inclusive regional development and just transitions to mitigate and adapt to climate change.

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“…Enthusiastically noting Built Up's extended temporal assessments of real estate's financial performance, Ashby Monk sees the similarity in his concerns for stewardship of the environment (see Monk et al, 2017). He formulates analytical methodologies for the risk and return of current investments in the provision of climate resilience that will benefit a much broader array of stakeholders over an extended period of inter-generational time.…”

Section: Ashby Hb Monkmentioning

confidence: 99%

Symposium – Built Up: An Historical Perspective on the Contemporary Principles and Practices of Real Estate Development, by Patrice Derrington. London: Routledge (2021)

2022

Environ Plan A

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Re-intermediating Investment Management

Cited by 5 publications

References 38 publications

The UK Infrastructure Bank and the financialization of public infrastructures amidst nationalist neoliberalism

The UK Infrastructure Bank and the financialization of public infrastructures amidst nationalist neoliberalism

Infrastructure debt funds and the assetization of public infrastructures

Symposium – Built Up: An Historical Perspective on the Contemporary Principles and Practices of Real Estate Development, by Patrice Derrington. London: Routledge (2021)

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