Global listed infrastructure, the opportunity
Global demand for infrastructure is surging - With an estimated US$57 trillion in investment required between 2013 and 2030i and fiscally constrained governments struggling to keep pace with demand, the listed infrastructure sector has grown rapidly. This has created the opportunity for informed investors to benefit from assets with the potential to generate both income and capital gains over the long-term.
Strong cash yield with ongoing growth potential - In an environment of slow economic growth and low interest rates, infrastructure assets can be an attractive solution for investors seeking stable returns and attractive yields. Infrastructure businesses typically provide essential services in controlled, monopoly style environments, often with revenues locked in by extended contracts or regulatory frameworks. As a result, they offer predictable, inflation-linked returns with low volatility and a low correlation to traditional asset classes such as equities and fixed income.
The liquidity and diversification of a listed investment - By choosing listed infrastructure, rather than a direct investment, you can benefit from:
Liquidity and transparency. Liquidity and constantly updated pricing gives our investment team more flexibility in building and rebalancing a portfolio of quality assets.
Diversification. Exposure to a broad range of assets for the same invested capital, allowing wider diversification across sectors and regions.
Specialist expertise. Access to a dedicated listed infrastructure investment team with significant specialist experience managing portfolios of infrastructure securities. Team members have covered multiple infrastructure sectors and regions through their careers.
1 McKinsey Global Institute, January 2013
AMP Capital, listed infrastructure experts
Specialist expertise from an industry leader AMP Capital has long been recognised as an infrastructure pioneer. With over 28 years of infrastructure experience and dedicated expertise, with more than 120 separate unlisted equity and debt investments since 1988.
Our team - AMP Capital has over 70 investment professionals focused exclusively on infrastructure investments, including a team of seven specialists dedicated to managing listed infrastructure portfolios for our clients. Our size, scale and reputation in infrastructure enable us to harness deep insights that help create better investment outcomes.
Listed infrastructure expertise - Successful investment in listed infrastructure requires experience in the specifics of infrastructure securities. The experience of our listed infrastructure investment team enables us to identify attractive long-term opportunities and to take advantage of market inefficiencies and temporary dislocations.
AMP Global Listed Infrastructure Fund
Leveraging a proven strategy with a track record dating back to 2010, the AMP Capital Global Listed Infrastructure Fund brings together exceptional infrastructure assets from multiple global markets in a single investment.
Our global listed infrastructure track record is underpinned by a rigorous, transparent and repeatable investment process designed to create a portfolio of high quality, core infrastructure assets. By focusing on companies with a dominant position and stable cashflows, then actively managing the portfolio to take advantage of changing asset values and market cycles, we have successfully delivered attractive risk-adjusted returns to our clients over the long-term.
Our listed infrastructure strategies focus on investing primarily in ‘core and pure’ infrastructure assets. These are companies that own and operate infrastructure assets with no or low exposure to commodity, volume and competition risks. We believe these companies typically provide more stable cashflow than other infrastructure assets, and are typically less volatile than the broader listed equity market.
We believe that the long-term nature of infrastructure assets and cashflow are best suited to bottom-up, fundamental analysis. Our investment approach is underpinned by rigorous quality analysis and due diligence on all infrastructure assets together with a focus on buying securities that are attractively priced.
American Tower Corporation
Dominant position: A leading independent owner, operator and developer of wireless and broadcast communications real estate. Quality assets: a portfolio of over 143,000 communications sites, including approximately 40,000 towers in the United States and more than 102,000 towers internationally.
Strong earnings potential: Space on their towers is leased to telcos and broadcasters for periods of 10 years with no exposure to the amount of usage.
Sector: Oil and gas storage and transportation
Dominant position: KMI is one of the largest energy infrastructure company in North America. It owns an interest in or operate approximately 84,000 miles of pipelines and approximately 180 terminals. It is a high quality company with secured growth projects and no need to access capital markets.
Strong earnings potential: KMI’s cash flow is some of the highest quality in the midstream sector, with a large percentage derived from take or pay contracts. Combined with backlog high-grading efforts, there is no expected need to access capital markets to fund growth capital for the next two years.
Understanding the risks
Risks specific to the fund include the risks of investing in share markets, infrastructure and international markets; as well as risks associated with derivatives and investment management.
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