Today when we look at yield, we tend to see it only in absolute terms but when we compare the yield/equity risk ratio of debt and equity, debt remains attractive: it is less volatile, less risky and can provide a steady return over time. Moreover, security rights are provided in cases of default. The yield offered is thus linked to the risk, which is quite low. These assets still deliver – thanks to the illiquidity premium – an additional return of between 100 and 150 basis points over bonds rated in the same category.
Importantly, renewable energy accounts for a third of our portfolio of infrastructure debts, reflecting our desire to use environmental, social and governance (ESG) criteria when selecting our investments. We work on these issues with an independent third party involved in measuring the environmental and climate impact of projects. These ESG elements are very important for our investors, as they too are seeking to develop this type of approach across their own management and are required to establish ESG reporting for their assets. We also monitor our investments annually in the light of ESG criteria.
