This quarter we continue to look at trends in debt and equity metrics relying primarily on publicly available information. In relation to the equity trends, we use the Mazars indices of listed infrastructure funds and listed renewable energy funds, compiled on the basis set out in Appendix 1 to this update.

In addition, this quarter we have included a spotlight on how debt impacts on equity valuations in the sector. Although traditional valuation theory links higher debt to more risk and therefore a higher cost of equity, the approach in infrastructure valuations needs to be more nuanced than this.