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, we ask: what impact could rising interest rates have on our clients and infrastructure asset values?
Should infrastructure asset managers be concerned about interest-rate increases, and if so, what should they be doing to manage this potential exposure on behalf of their clients?
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 in the document below.