Revealing the Full Value of Infrastructure Investment

The Capstone workshop objective is to help Morgan Stanley deliver world-class advisory services and help their clients reveal the full value behind impact infrastructure investments. "Full value" includes the societal, environmental, and corporate governance (ESG) value combined with financial return the public-private partnerships (P3) infrastructure investments can provide. The Capstone team started by reviewing almost 200 academic and professional reports and guides in order to understand the value of P3s, and how one can and should evaluate such projects. Next the team turned to search for valuation models that are able to capture the costs, benefits, risks, and financial returns of projects in different sectors in hopes of finding tools to help investors compare apples-to-apples the impact of various infrastructure investments opportunities. The team located over thirty publicly available valuation tools, and applied screening criteria to isolate the tools which showed the greatest potential to be recommended to the Capstone client and their clients. The team will perform deep-dive evaluations of five of these models. In addition, the team has completed an introductory section to help potential investors understand the main roles, responsibilities, and risks associated with various P3 delivery models vis-à-vis traditional models. As an added value to the client, the team proposed to construct a simulation of a P3 investment fund based on principles borrowed from the M&A Arbitrage’s fund world. Moving forward, the team also plan to look at the role infrastructure exchanges may play in the future of the P3 investments.