Only 'principal markets' (IFRS 13) are included in the Universe
Financial information availability can limit the inclusion of certain principal markets in the universe
Principal markets have the most active secondary markets
National Market Universe Inclusion Criteria
National markets that are principal markets and can be included in the broad market universe should they exhibit a minimum level of activity in terms of number of transactions, contribution to the global market, and level of ongoing secondary market activity. Measurement of this activity must also be possible, hence a minimum level of transaction information should be available lest this market be completely opaque. Inclusion criteria for individual national markets include:
- A minimum number or volume of primary or secondary market trades, indicating that more than a few isolated transactions took place on each measurement date;
- A minimum size (expressed in book value) relative to the existing broad market universe, suggesting that the addition of the market in question would increase the information content of a broad market index; and
- A minimum level of audited financial information about the relevant investable infrastructure companies in the market.
The minimum thresholds used by EDHECinfra are reported in Table 1. These criteria are based on EDHECinfra’s comprehensive study of the global investable infrastructure market, which includes 107 countries. Market selection is dependent on a turnover ratio, defined as the ratio of secondary to primary market activity. A high turnover ratio indicates that a market is active and that primary investments are not only held to maturity (primarily by construction companies and banks) but also actively traded and priced by the range of investors active in the sector.
The markets that meet these criteria include, for the most part, a majority of OECD countries and a few so-called emerging markets. Infrastructure markets are national markets by nature; however, we treat the European Union as one unified market, given its level of regulatory and market integration. Table 2 lists the 25 markets that can be included in the EDHECinfra Universe.
Table 1: Minimum National Market Inclusion Criteria
Criteria | Minimum Threshold (On Measurement Date) | |
Size | Cumulative primary and secondary dealflow since 2000 represents at least 0.5% of the total value of all identified markets AND | |
Market Activity | Market turnover ratio | - at least 20% by number of transactions OR |
| - at least 20% by transaction volume OR | ||
- the country is part of the European Union** | ||
Financial Information | Availability of basic procurement and financial information including incorporation and financial close dates, book values, etc. | |
. **The European Union is a homogeneous procurement market and can be considered a single market compared with other parts of the global marketplace.
Table 2: 25 National Markets Meeting the 'Principal Market' Inclusion Criteria
Country | Turnover (Number) | Turnover (Volume) | Share of Global Dealflow | Financial Data Availability | Inclusion in Universe |
Australia | >50% | >20% | >10% | Fair |  |
Austria | >90% | >25% | <1% | Good | |
Brazil | >5% | ~20% | >3% | Fair | |
Canada | >50% | >50% | >3% | Very poor |  |
Chile | >50% | >50% | >1% | Good | |
Germany | >30% | >50% | >3% | Good | |
Spain | >15% | >25% | >3% | Good | |
Finland | >30% | >50% | <1% | Good | |
France | >20% | >50% | >3% | Good | |
United Kingdom | >50% | >40% | >10% | Good | |
Hungary | >50% | >60% | <1% | Very poor | |
Ireland | >25% | >30% | <1% | Good | |
Italy | >25% | >30% | >2.5% | Good | |
Malaysia | >40% | >40% | <1% | Good | |
Netherlands | >50% | >30% | 1% | Limited |  |
Norway | >65% | >30% | <1% | Good | |
New Zealand | >90% | >90% | <1% | Good | |
Philippines | >90% | >50% | 0.5% | Fair | |
Poland | >80% | >50% | 0.5% | Limited | |
Portugal | >20% | >25% | 1% | Good | |
Russia | >20% | >10% | >1.5% | Very poor | |
Singapore | >50% | >25% | 0.5% | Good | |
Slovakia | >80% | >20% | <0.5% | Fair | |
Sweden | >75% | >50% | 0.3% | Good | |
USA | >70% | 50% | >20% | Very poor | |
Included in the universe Not included in the universe Included but limited data (not representative)
(rounded values as of Q4 2019)