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titleKey Points
  • Only the most active secondary markets should be considered when documenting the evolution of investor preferences.
  • This 'principal market' provides the best insights into the market price of risk for unlisted infrastructure investments. 
  • Markets included in the Index Universe and asset pricing approach should be principal markets. 

The notion of fair value is a market-based measurement rather than an entity based measurement i.e. it is concerned with how average prices are formed in the most representative markets. In the language of academic finance, fair value is about betas i.e. the combined exposure of each firm to priced risk factors, but not alpha, which represents market outperformance and is the result of private information.