As Europe’s leading infrastructure investor, Ardian joined with French digital consultancy Fabernovel to create a new framework for understanding the digitalization of this asset class: Augmented Infrastructure. This comprehensive study demonstrates how digitalizing infrastructure creates new opportunities for both owners and users, thanks to the connectivity and huge flows of real-time data that digitalization unlocks. But it also highlights the regulatory and competition issues that digital disruption brings with it.
Ardian Infrastructure now scores all potential investments against five attributes as part of the due diligence process, allowing us to benchmark each asset against its peers to identify opportunities and best practices. This process allows us to map the market opportunity under each heading, indicating where the major value creation opportunities and obstacles lie. We will review our portfolio every year using the same system.
Key attributes of digitalized infrastructure
Augmented Infrastructure proposes a new valuation methodology based on the five key attributes of digitalized infrastructure. These assets are:
Capable of monitoring their own operational performance and capacity in real time and maximizing the efficiency of the service they deliver. Our portfolio company Ascendi, a motorway operator, uses SustIMS, a system developed with two Portuguese universities, to monitor the condition of its assets, schedule inspections, assess risks and model deterioration and maintenance costs.
Forming part of an ecosystem that is open to other players and can support additional services. Amsterdam’s Schiphol Airport has opened its API platform to give external developers access to its business data, enabling them to create services that will benefit their customers as well as airport users generally.
Able to support a growing range of services and provide opportunities to monetize them. 5G mobile has the potential to become ‘the platform of platforms,’ providing the basic infrastructure that will enable connectivity for everything, everywhere. It will have 10 times the capacity of 4G, one tenth of the latency and consume 100 times less power per unit of data transferred.
Able to absorb shocks and adapt to a changing environment. In 2017, our portfolio company Indigo converted 16,000sqm of car parking in the Paris district of La Défense into co-working, events and exhibition space. This met local demand for new facilities, adjusted to reduced demand for parking space and protected the asset’s long-term cash flows.
Aiming to have a positive impact on society, and as a minimum working to reduce negative externalities. Our renewable energy platform in Italy, 3New, has multiplied its generation capacity ten-fold since 2007, creating sustainable jobs and providing clean energy to thousands of customers. Its growth reinforces the ESG principles that are central to Ardian’s investment strategy.