EDHEC-Risk Institute and Rothschild have announced the creation of a research chair entitled ‘The
Case for Inflation-Linked Corporate Bonds: Issuers’ and Investors’ Perspectives’. The purpose of the
research chair is to support research undertaken at EDHEC-Risk Institute on the benefits of inflationlinked
corporate bonds both from the issuers’ as well as from the investors’ points of view. The chair
will also focus on contrasting the analysis, in corporate finance, and perceptions of inflation-linked
corporate bonds both by issuers and investors. The chair is led by Lionel Martellini, scientific director
of EDHEC-Risk Institute.
According to Professor Martellini, “While a dominant fraction of inflation-linked debt is issued by
sovereign states, there has been recent interest amongst various state-owned agencies, municipalities
and also corporations, in particular from the utility, financial-services and real estate sectors, to issue
inflation-linked bonds. On the supply side, intuition suggests that if a given firm's or a municipality’s
revenues tend to grow with inflation, then inflation-linked issuance is naturally hedged through
evolution of revenues. On the demand side, strong interest is expected as inflation hedging has become
a concern of critical importance for pension funds with inflation-linked liabilities, and for private
investors, who consider inflation as a direct threat with respect to the protection of their purchasing
power.”
Jean-Louis Laurens, Managing Partner and CEO of Rothschild & Cie Gestion, said, “This partnership
with EDHEC-Risk Institute will allow for in-depth analysis of inflation-linked corporate bonds, which
is an area of crucial importance both corporate bond issuers on one hand, and institutional and private
investors on the other. By sponsoring EDHEC-Risk Institute, Rothschild wishes to support initiatives
which lead to genuine improvements in techniques and knowledge throughout the industry. This is
done in conjunction with our colleagues of the debt advisory department”.