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Infrastructure Debt

insurance-asia-newsinsurence-asia-news

We invest across the full capital spectrum for infrastructure debt, with a proven track record in senior secured infrastructure debt. Equipped with a fiduciary origination strategy approach to transactions that meets investors’ investment objectives and risk-return requirements, we offer a flexible platform of both separately managed accounts, co-investment programmes and pooled funds.

Our Infrastructure Debt franchise is gathering industry recognition at pace, having received three awards in 2021:

  • Best Infrastructure Debt Manager by Insurance Asia News
  • Best Institutional Strategy - Infrastructure debt investment platform by AsianInvestor
  • Alternatives Investment Provider of the Year in The Asset Management Awards 2021

Sources: Award issued by Insurance AsiaNews as of May 2020. The award assessment is based on business successes in 2019, assets gathered, new clients won, mandates gained from existing clients or example of outstanding performance.
Institutional Asset Management Awards 2021 - Best Infrastructure Manager, Insurance Asia News, May 2021
AsianInvestor Asset Management Awards 2021 - Best Institutional Strategy - Infrastructure debt investment platform, AsianInvestor, May 2021
AsianInvestor Asset Management Awards 2021 - Alternatives Investment Provider of the Year, AsianInvestor, May 2021

Infrastructure Debt - Investing across the capital spectrum

In this article we double down on what's happening in Infrastructure Debt markets.

"For investors squeezed between intense volatility and low interest rates, Infrastructure Debt offers the prospect of yield combined with relatively long-term security" says Shantini Nair, Senior Product Specialist, Infrastructure Debt, HSBC Asset Management as she talks us through what’s happening in Infrastructure Debt markets.

Read more


Infrastructure Debt - Investing across the capital spectrum

The hunt for yield

Investors are facing incrementally complex challenges in their search for attractive risk-adjusted returns
under the current lower-for-longer market conditions. Many of them have pivoted their investment allocations
towards more illiquid assets, with Infrastructure Debt in particular emerging as an increasingly popular asset
class with institutional investors.

In this brochure, we explore why the current market landscape is creating a compelling case for investing in
Infrastructure Debt.

Read more


Infrastructure Debt - cover

HSBC Infrastructure Debt Investment Capabilities

Why invest in infrastructure debt?

Relatively attractive yields and better risk-adjusted potential returns

♦ Favourable yield comparison to corporate and sovereign credit of similar or better credit quality and duration.

♦ Liquidity/complexity premium potential

 

 

improve yields

 

 

Improved regulatory* capital efficiency

♦ Efficient capital treatment for Solvency II Qualifying Infrastructure Investments, even when unrated. Investors often rely on internal / manager credit rating estimates.

 

 

improve regulatory

 

 

Volatility control

♦ Relatively predictable cash flows with lower volatility.

♦ Low correlation to the market and traditional asset classes.

♦ Best exploited by constructing diversified portfolios by duration, sectors, geographies

 

 

volatility control

Credit risk management

♦ Investment-grade or strong non-investment-grade quality, predictable cash flows, robust covenant protection and high value collateral, leading to lower default rates and higher recovery rates than comparable credit**

 

 

credit risk reduction

 

 

Improved liability hedging/matching

♦ Maturities of up to 40 years offering ability to target bespoke durations and formats 

 

 

improve liability

 

 

 

 

 

Source: HSBC Asset Management, June 2020. For Illustrative purposes only.
*Refers to Solvency Capital under Solvency II. **Moody's Investors Service, 6 August 2019.
Investment involves risk and past performance is not an indicator of future returns.

Why HSBC Asset Management for infrastructure debt?

A proven track record*as an infrastructure credit specialist

♦ Strong track record and a proven ability in deploying assets

♦ Breadth of expertise across senior and junior infrastructure financing markets globally

♦ Bespoke investment solutions that meets the needs of Asian insurers

asset-sourcing-capabilities

Differentiated global infra asset sourcing capabilities

Benefitting from a global network of origination relationships, including those of HSBC Bank in the infrastructure market

♦ Strong brand presence and deep relationships across developed and developing infrastructure markets

♦ This has provided access to a globally diversified portfolio, screening more than 550 investment opportunities over the past two years.

dedicated-investment-platform

An award-winning^, dedicated investment platform

♦ Highly experienced senior investment team, averaging more than 20 years in global infrastructure financing across market cycles.

♦ Rigorous investment process including a robust credit assessment framework that sits within an overarching active portfolio construction and management approach.

♦ Ability to cater for different investment formats including bonds, loans and notes.

* Strong track record of delivering a yield premium averaging 1 per cent p.a. over public corporate bonds
^ Award issued by Insurance AsiaNews as of May 2020. The award assessment is based on business successes in 2019, assets gathered, new clients won, mandates gained from existing clients or example of outstanding performance. Our dedicated investment platform is able to cater for different investment formats (i.e. bond, loan, notes) & products (i.e. fixed vs floating) across a range of sectors and longer dated tenors so as to maximize the investible opportunity set.

Investment involves risk and past performance is not an indicator of future returns.
Source: HSBC Asset Management June 2020.

A dedicated specialist team

debth of resources

Depth of resources

experience

Strong experience

sizable-scale

An infrastructure credit specialist

11

Investment professionals solely dedicated to infrastructure debt

7

Infrastructure Investment Forum members overseeing each transaction

16

Years average experience in the infrastructure debt Investments team

20

Years average infrastructure debt experience among the Portfolio Managers

♦ Strong track record of delivering illiquidity premium

♦ A proven ability in deploying assets

Insights

Debt Strategies Gain Interest

In this article, Glenn Fox and Shantini Nair discuss how infrastructure debt offers the prospect of yield combined with relative long-term security.

 

Infrastructure debt

How portfolio construction can help mitigate risk in infrastructure debt investing?

To find out more about infrastructure debt from our relationship managers, please click here:

Disclaimer

This page is prepared for general information purposes only and does not have any regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive it. Any views and opinions expressed are subject to change without notice. This document does not constitute an offering document and should not be construed as a recommendation, an offer to sell or the solicitation of an offer to purchase or subscribe to any investment.