When and why are firms removed from the index universe?
Answer
An infrastructure company is removed from the Index (or Sample) Universe only if:
it expires in less than the minimum time to maturity (for infrastructure projects)
it is less than the minimum size threshold
it is bankrupt
it has been acquired by another firm
it ceases to report its financials for more than two years
Universe exclusion criteria:
Minimum time to maturity: 1 year
Minimum size threshold: USD 50m in total assets
Things to consider
When an asset-level company (ProjCo) is acquired by a holding company (HoldCo) whose sole purpose is to hold ProjCo and some extra financing (usually senior debt), ProjCo is excluded from the Index from the acquisition (quarter end) date onward and replaced by HoldCo. ProjCo and HoldCo are considered to be different firms and are identified differently.