The factors supporting a growing allocation to global infrastructure
There are several indicators the listed infrastructure sector still has a long runway for growth and could see growing allocations within portfolios in coming years, according to a top executive.
Amid growing economic uncertainty, Andrew Maple-Brown, co-founder and managing director of Maple-Brown Abbott Global Listed Infrastructure believed infrastructure would see continued popularity.
As of 2021, assets under management in listed infrastructure globally rose to US$145 billion ($216 billion), compared to US$27 billion in 2012.
The number of global listed infrastructure managers, too, had doubled over the same period to approximately 60.
“This is a dramatic increase and attests to the growing recognition by investors of the role that infrastructure can play in a portfolio, including through its inflation protection, income yield and reduced volatility characteristics when compared to global equities, and the diversification benefits that it can provide a portfolio,” Maple-Brown elaborated.
“We believe this growth will continue and that global listed infrastructure will become a growing allocation within investment portfolios. GLIO projections suggest we could see funds under management in the sector grow to around US$350 billion in 2030.”
Other factors that supported the growth of the infrastructure sector included its key role in enabling digitalisation, electrification, and supporting the energy transition.
For the firm, which marked its 10th anniversary at the end of 2022, there had been good opportunities globally in telecommunication tower companies and toll roads.
Maple-Brown explained: “We view these two sectors as offering some of the highest-quality infrastructure assets, yet for different reasons we have recently seen certain such assets trading at significant discounts to our valuations.
“Interestingly, we have not seen a corresponding softening of values for these assets in the direct infrastructure market, reflecting a divergence between the markets.”
As of September 2022, the Maple-Brown Global Listed Infrastructure investment team managed more than $4 billion on behalf of clients across North America, Europe, the Middle East and Asia Pacific regions. This geographic diversity reflected “the global demand for defensive infrastructure investments with stable cashflows and inflation linkages”, the firm said.
Recommended for you
Private investment opportunities are moving up on the list of what investors want from their financial advisers, according to Natixis IM, and over half of firms say they are offering them more strategies.
Two asset managers have each expanded their product suite with the launch of new global equity funds for Australian investors.
Perpetual has confirmed it is in exclusive talks with global investment company KKR regarding an acquisition of its corporate trust and wealth management businesses.
Platinum Asset Management has put its two closed-end funds under strategic review in a bid to reduce the share price discount to pre-tax NTA and maximise shareholder value.
Add new comment