Nick Dignam from Fortitude Investment Partners shares insights with Lachlan Maddock from Fortitude Investment Partners on how a diversified portfolio in mid-market private equity is structured. The Inside Adviser
The world of alternative investments is at a crossroads. As markets defy expectations and liquidity concerns take centre stage, investors find themselves forced to rethink how they deploy capital in an increasingly complex environment.
Infrastructure launch as private deals accelerate
Infrastructure remains among the hottest topics in investment banking and equity circles in 2021. Three blockbuster deals involving AusNet (ASX: AST), Sydney Airport (ASX: SYD) and Spark Infrastructure (ASX: SKI) have once again evidenced that demand from massive private investors like AustralianSuper and the Future Fund isn’t going anywhere.
Industry insiders are suggesting the deals reflect a growing price and valuation differential between listed and unlisted infrastructure. Unlisted infrastructure, due to its very nature, is valued less regularly and therefore hasn’t seen the correction sell-off that occurred in everything from toll roads to airports and pipelines due to the pandemic.
Professional investors suggest this is an opportunity that is set to continue, with more focus being applied to identifying and investing into overseas infrastructure assets. Commenting recently, Ausbil’s global infrastructure team said that “while these transactions can be rewarding for shareholders should they occur, it also means that the ASX will have fewer and fewer ‘essential’ infrastructure investment options.”
This is no doubt one of the reasons behind Resolution Capital’s recent launch of a Global Listed Infrastructure Fund, which joins the likes of Ausbil, First Sentier, Clearbridge and Magellan in the GLI sector.
Sonia Luton, Resolution Capital’s managing director, said the fund offers exposure to physical assets that deliver essential services to communities across the world. “In our view, the assets in the listed sector are some of the best infrastructure assets in the world, which most investors would not be able to access directly as individuals.”
The fund will be led by a team of portfolio managers, comprising Jan de Vos, Mark Jones, and Sarah Lau.
“The underlying physical assets of the securities within the fund’s portfolio have high barriers to competition, require significant capital investment and importantly, typically generate long-dated, predictable cashflows,” says de Vos.
“Global listed infrastructure is an asset class that can play a critical role in investment portfolios, offering inflation-protected income and attractive risk-adjusted returns. Furthermore, major secular growth trends such as decarbonisation, digitisation and urban population growth support the long-term outlook for many listed infrastructure assets,” he says.
The Resolution Capital Global Listed Infrastructure Fund aims to achieve an annual total return that exceeds the total return of the Benchmark (the FTSE Developed Core Infrastructure 50/50 Index Net TRI), after fees, on a rolling three-year basis.
