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.
AUTHOR
Rhea Nath
Recommended for you
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
