However, industry practices tend to rely on 'smoothed' market inputs that do not reflect the market price of risk or its variance over time.
The frequent use of ad hoc 'illiquidity discounts' is not compatible with the fair value guidance.
Comparable transactions are hard to come by in the unlisted infrastructure sector.
Listed infrastructure proxies have been shown to include significant biases and noise, and are not representative of the unlisted infrastructure universe.
Industry Industry practices lack a general framework for the estimation of appropriate discount factors over timefor unlisted and illiquid investments such as infrastructure equity and debt, leading to potentially significant biases in the measurement of fair value, as well as the risk taken by investors.
