EDHEC-Risk Concept Industry Analysis Featured Analysis Latest EDHEC-Risk Surveys Features Interviews Indexes and Benchmarking FTSE EDHEC-Risk Efficient Index Series FTSE EDHEC-Risk ERAFP SRI Index EDHEC-Risk Alternative Indexes EDHEC IEIF Quarterly Commercial Property Index (France) Hedge Fund Index Research Equity Index Research Amundi "ETF, Indexing and Smart Beta Investment Strategies" Research Chair Rothschild & Cie "Active Allocation to Smart Factor Indices" Research Chair Index Regulation and Transparency ERI Scientific Beta Performance and Risk Reporting Hedge Fund Performance Performance Measurement for Traditional Investment CACEIS "New Frontiers in Risk Assessment and Performance Reporting" Research Chair Asset Allocation and Alternative Diversification Real Assets Meridiam Infrastructure/Campbell Lutyens "Infrastructure Equity Investment Management and Benchmarking" Research Chair Natixis "Investment and Governance Characteristics of Infrastructure Debt Instruments" Research Chair Société Générale Prime Services (Newedge) "Advanced Modelling for Alternative Investments" Research Chair CME Group "Exploring the Commodity Futures Risk Premium: Implications for Asset Allocation and Regulation" Strategic Research Project Asset Allocation and Derivative Instruments Volatility Research Eurex "The Benefits of Volatility Derivatives in Equity Portfolio Management" Strategic Research Project SGCIB "Structured Investment Strategies" Research ALM and Asset Allocation Solutions ALM and Private Wealth Management AXA Investment Managers "Regulation and Institutional Investment" Research Chair BNP Paribas Investment Partners "ALM and Institutional Investment Management" Research Chair Deutsche Bank "Asset-Liability Management Techniques for Sovereign Wealth Fund Management" Research Chair Lyxor "Risk Allocation Solutions" Research Chair Merrill Lynch Wealth Management "Risk Allocation Framework for Goal-Driven Investing Strategies" Research Chair Ontario Teachers' Pension Plan "Advanced Investment Solutions for Liability Hedging for Inflation Risk" Research Chair Non-Financial Risks, Regulation and Innovations Risk and Regulation in the European Fund Management Industry Index Regulation and Transparency Best Execution: MiFID and TCA Mitigating Hedge Funds Operational Risks FBF "Innovations and Regulations in Investment Banking" Research Chair EDHEC-Risk Publications All EDHEC-Risk Publications EDHEC-Risk Position Papers IPE EDHEC-Risk Institute Research Insights AsianInvestor EDHEC-Risk Institute Research Insights P&I EDHEC-Risk Institute Research for Institutional Money Management Books EDHEC-Risk Newsletter Events Events organised by EDHEC-Risk Institute EDHEC-Risk Smart Beta Day Amsterdam 2017, Amsterdam, 21 November, 2017 EDHEC-Risk Smart Beta Day North America 2017, New York, 6 December, 2017 Events involving EDHEC-Risk Institute's participation EDHEC-Risk Institute Presentation Research Programmes Research Chairs and Strategic and Private Research Projects Partnership International Advisory Board Team EDHEC-Risk News EDHEC-Risk Newsletter EDHEC-Risk Press Releases EDHEC-Risk in the Press Careers EDHEC Risk Institute-Asia EDHEC Business School EDHEC-Risk Executive Education EDHEC-Risk Advances in Asset Allocation Blended Learning Programme 2017-2018 Yale School of Management - EDHEC-Risk Institute Certificate in Risk and Investment Management Yale SOM-EDHEC-Risk Harvesting Risk Premia in Alternative Asset Classes and Investment Strategies Seminar, New Haven, 5-7 February, 2018 Investment Management Seminars Contact EDHEC-Risk Executive Education Contact Us ERI Scientific Beta EDHEC PhD in Finance
Institutional Investment - November 28, 2012

Institutional investors are potential bridges for the demand-supply mismatch in specialised financing - an interview with Laurent Mignon

In this month’s interview, Laurent Mignon, CEO of Natixis, discusses the recent launch of the research chair at EDHEC-Risk Institute supported by Natixis on the investment characteristics and governance of infrastructure debt instruments, his hopes for the research that will be conducted within the chair, and the usefulness of debt infrastructure for institutional investors.

Laurent Mignon

Natixis and EDHEC-Risk Institute have launched a research chair on the investment characteristics and governance of infrastructure debt instruments. Could you tell us why you decided to focus on this area of investment?

Laurent Mignon: Within Wholesale Banking, Natixis has developed a strong franchise in the Infrastructure sector and it seemed normal to assist corporate clients and investors in this challenging and changing environment, and enable the institutional investors to play a larger role in this market.

The aim of the partnership is to deliver original research in the underdeveloped field of infrastructure finance and to present this research directly to institutional investors. Could you tell us more about your hopes for the chair?

Laurent Mignon: The partnership with EDHEC-Risk Institute will facilitate the cooperation between banks and institutional investors by sharing an understanding of the investment characteristics within this asset class and for which there is a relative shortfall of publicly available information, as most of the assets are on the banks’ balance sheets.

What do you think are the advantages for institutional investors of investing in the debt side of infrastructure rather than the equity side?

Laurent Mignon: Debt and equity investments are simply different ways to invest in long-term cash flows of an infrastructure asset with different risk and return characteristics. The difference lies in the priority access of those cash flows. The infrastructure debt benefits from a “project finance” contractual structure and associated security package that brings a strong control on cash flows of the asset that historically have demonstrated a lower default rate compared to corporate but more importantly much higher recovery rate (around 80%). The infrastructure debt offers a priority claims access to secured cash flow with long maturities and interesting yields (which makes it attractive for investors that need to match their liabilities, such as pension funds and life insurance companies).

The research chair is being managed in Singapore through EDHEC Risk Institute—Asia. What are Natixis's ambitions in the Asia-Pacific region?

Laurent Mignon: In Asia, GDP growth and global wealth are both increasing way faster than in the US or Europe. To support the development growth of businesses in the region, Natixis will leverage on its recognized set of expertises (Aircraft, Infrastructure, Energy & Commodities, Bonds, Strategic Equity...) to offer tailor-made financing solutions. In countries with excess reserves and liquidity, Natixis will work in close relationship with investors to structure customized products that match their investments needs. In a low interest rate environment, Asian investors are a significant business target not only for our capital markets activities but also for our financing activities.

In a context where European banks are undertaking stringent measures to reduce the utilization of scarce resources (RWA & USD LT liquidity), institutional investors are seen as potential bridges for demand-supply mismatch in specialized financing (infrastructure/ asset finance). The implementation of the “originate to distribute” business model will improve the value chain to structure transactions and package investment vehicles that better match the specific needs of each investor segment.

What made you decide to partner with EDHEC-Risk Institute on this research chair?

Laurent Mignon: We have found in EDHEC-Risk Institute a very unique research institution which has succeeded in combining high standard academic research with a very practical approach and strong sense of requirements for practitioner-oriented publications.

About Laurent Mignon

Since May 2009, Laurent Mignon is the Chief Executive Officer of Natixis and member of the management board of BPCE.

From September 2007 to May 2009, he has been General Partner of Oddo & Cie, a French investment bank privately owned.

Before joining Oddo & Cie, Laurent Mignon was the Chief Executive Officer of AGF France. He joined AGF in 1997 as Chief Financial Officer and was nominated to be a member of the Executive Committee in 1998. He then has been in charge of the Group’s activities in asset management, banking, life insurance and credit insurance (Euler & Hermes group) before becoming Chief Executive Officer.

Laurent Mignon is Chairman of Coface and Natixis Global Asset Management, a member of the Board of Sequana, a member of the Board and of the Audit Committee of Arkema and an independent Director of Lazard.

Laurent Mignon is 48 years old, married and has three children. He is a graduate of HEC (Hautes Etudes Commerciales) and of the Stanford Executive Program.