How are the firms included in the index universe selected?

Answer

Scientific Infra & Private Assets has identified a universe of investable unlisted infrastructure companies in all the 'principal markets', i.e. the most active markets in which average investor price preferences are most likely to be revealed.

This universe includes more than 27 countries and in excess of 9,000 firms that qualify as infrastructure companies under the TICCS® taxonomy. Going back over 20 years, the investable universe was different than it is today. For example, there were (proportionally) more utilities and far fewer contracted wind farm projects.

The sample (or index) universe is built by selecting firms in the universe to form a dataset that is as representative as possible of the underlying population of investible infrastructure firms at each point in time.

There are three approaches, depending on the availability of information in a given market:

 In Principal Markets where corporate information is generally available either through corporate registries, freedom of information requests or multiple data contributors, a sample is built that aims to cover 50% of the market size by book value and a representative set of companies by TICCS® pillars 1, 2, and 4 (business risk, industrial activities, corporate governance). This is the case for most of the markets identified including European countries, the UK, Australia and key Latin American nations.

 In Principal Markets where information is available but limited, meaning that building a representative set is not achievable, a sample of the top 20 largest, or best documented, deals is built. This includes most emerging markets and the US.  

 Principal Markets where corporate information is too scarce (especially audited accounts) are excluded from the sample, e.g. Canada.

Once markets for which information can be collected have been selected, the Sample Universe is built for each year. 

• In any given year, if a firm is already in the Sample Universe, it stays in it unless it has to be excluded. 

• Given the data limitations described above, more firms are added as needed to keep the sample representative of each country.

Things to consider

The definition of 'principal infrastructure market' is based on deal flow and secondary market activity. The list of countries included in this category can evolve over time as private infrastructure investment becomes more or less prevalent in different jurisdictions. 

Coverage of North America is limited (as of Q4 2023) due to limited access to corporate data. Increasing coverage is planned for 2024 using contributed data and alternative data sources.