Tim Whittaker challenges infrastructure's defensive reputation in a new paper, arguing that infrequent valuations create false security. The EDHEC director claims smoothed valuations don't reduce risk but concentrate it, particularly concerning as private markets have become multi-trillion-dollar behemoths potentially creating systemic risk that regulators should address.

Thames Water exemplifies the problem, with investors seeing £5 billion vanish due to inadequate valuation practices. Whittaker warns that outdated models and stale inputs obscure true economic risk, noting the water utility's collapse stemmed from excessive debt rather than decreased demand for its essential services.

Whittaker advocates for more frequent, accurate valuations tied to investor liquidity needs and triggered by significant events. He contends infrastructure requires higher return expectations of 12% rather than 8% to properly compensate for risk, emphasizing that valuations must reflect economic substance rather than accounting form to protect investors.