Rising to the interest rate challenge
For some time, investors have been aware that interest rates are at an all-time low. With the Bank of England raising interest rates for the first time in a decade, Peter Hofbauer, Head of Infrastructure, Hermes Investment Management, asks: what impact could rising interest rates have on investors and infrastructure asset values? At Hermes Infrastructure, we have been focussed on the potential impact of rising interest rates and structured our portfolio over the last five years to ensure it is resilient against future increases in real interest rates. Some of the issues considered and steps we have taken to manage this potential exposure are set out below.