Tap into a relatively stable and growing segment of the equity market by investing in essential services
Infrastructure assets have the potential to offer investors steady dividend growth, protection from inflation and long-term capital growth. These assets provide essential services – examples range from utilities and toll roads to railroads, ports, airports, energy pipelines, mobile towers and satellites. The listed infrastructure investment universe has a market capitalization of over US$2 trillion as at January 31, 2018 and continues to grow due to structural drivers including urbanization, climate change, globalization and the digital revolution. This broad and growing opportunity set gives investors the ability to build well-diversified and liquid portfolios. Investors are increasingly recognizing that investments in these assets – backed by the right business model – have the potential to deliver attractive long-term returns.
Infrastructure assets can offer lower volatility and some inflation protection, when compared to other equities
As owners of essential assets, infrastructure securities may deliver smoother returns than the broader equity market during periods of higher market volatility. Water, power, transportation – these are services that consumers today can't go without, no matter what the stock market is doing. As a result, company cash flows tend to be very stable and relatively immune to economic cycles. Because inflation protection is built into many infrastructure assets’ pricing models, infrastructure can also provide a powerful defense against the adverse effects of inflation.
Gain liquid and diversified exposure to infrastructure, managed by a specialist team
Our investment team constructs high conviction portfolios with appropriate exposure to both infrastructure growth and utilities income, which is important for performance throughout a full economic cycle. We seek to maximize risk-adjusted returns by conducting in-depth due diligence and then investing in quality companies that are at a discount to our estimate of intrinsic value. Our portfolios are well diversified by sector and country, reducing event, regulatory and political risk. Environmental, social and governance (ESG) issues are fundamental to infrastructure companies, given their significant service obligations and moral accountability to the communities in which they operate. ESG issues have therefore been incorporated into our investment process through our quality ranking model.
Our team of nine infrastructure specialists is one of the most experienced in this space. The team was established by Peter and Andrew over 10 years ago. Team members bring diverse backgrounds and deep experience in both infrastructure and equities markets to our funds. We conduct over 500 company visits each year, ranging from company management to competitors, suppliers, customers, regulators, government officials and industry bodies. We strive for a culture where each person’s views are valued, peer review is constructive, specialist knowledge is shared, and the focus is on the client outcome over the long term.
Our corporate RI strategy is based upon three strategic pillars of quality, stewardship and engagement.
ESG issues are fundamental to infrastructure companies, given they have significant service obligations and moral accountability to the communities in which they operate.
ESG analysis is integrated into our investment process through our quality assessment and ranking model. This model consists of 25 criteria that influence stock returns in general and infrastructure securities in particular. A score is assigned to each criterion; a lower quality score makes it harder for a stock to be included within the overall portfolio. ESG criteria account for 20% of the overall quality score. Learn more about the Global Listed Infrastructure team's approach to Responsible Investment.