Maple-Brown Abbott
Listed Global Infrastructure Fund
We are specifically looking for those companies with the best combinations of low volatility of cash flows and strong inflation linkage.
We see approximately 110 companies globally as having such characteristics. These companies have a market capitalisation of approximately USD $1.3 trillion – this is clearly a very sizable opportunity set.
In regards to sectors, approximately 50% of the global listed infrastructure assets are regulated water, gas and electricity businesses, whilst the remainder is comprised of concession infrastructure assets including toll roads and airports, along with assets that are subject to long-dated contracts such as pipelines and satellite.
Detailed Analysis
We perform detailed bottom-up analysis of these companies, looking at all components of the businesses. There are a number of key factors we consider important, these include the regulatory or political risk, the suitability of the capital structure, the opportunities for future investment and the strength of corporate governance. We also build long-dated project finance type models in order to value these companies.
Investment Portfolios
Our investment portfolio is then constructed based on the strongest investment ideas, considered on a risk adjusted basis. We are a high conviction manager, typically only holding 25 to 35 securities. Finally, we conduct a risk review of our portfolio, reviewing for any unintended risks or biases – and based on the outputs from our proprietary Global Macroeconomic Advisory Committee.
Risk-aware
Whilst not being a top-down manager, we are explicitly macro-risk aware throughout the investment process, focussing on the macroeconomic factors we believe to have the greatest impact on infrastructure asset valuations. Stock selection is supported by ensuring timely and consistent macroeconomic assumptions across our models. Portfolio construction includes a focus on reducing the potential for negative tail risk by considering fiscal and monetary conditions across regions. In line with our longer term investment objective we are long-term holders of stocks, not traders.