Global listed infrastructure
What is Infrastructure?
Infrastructure assets are services and facilities that typically provide the physical framework that society requires to function on a daily basis. This includes electric, gas, water and renewable utilities, airports, railways, marine ports, pipelines, satellites and wireless network towers.
For the purposes of the portfolio, an infrastructure company is one that derives at least 70% of its revenues from, or has at least 70% of its assets committed to, the construction, development or financing of infrastructure assets, or the management, ownership and/or operation of infrastructure assets.
Infrastructure inherent business characteristics
Long-lived real assets
Infrastructure assets tend to have multi-decade lifespans, providing long-term cash flow streams to investors.
High barriers to entry
Infrastructure businesses tend to face less competition than most other industries, given significant zoning restrictions, large capital requirements and, in some cases, exclusivity rights that make it generally prohibitive for others to enter the market.
Predictable cash flows
Infrastructure businesses typically provide essential services with regulated or contracted revenues providing cash flow predictability.
Economic and inflation sensitivity
Depending on the infrastructure sub-sector, cash flows and asset values may have direct or indirect links to inflation, such as concession agreements, that provide for rate increases tied to local inflation. Infrastructure revenues may also benefit from long-term economic growth due to rising throughput.