As many wait for a slated $US1 trillion plan to materialise, investors on the ground are finding the so-called middle market to be fertile ground for investment opportunities.
Following the speculated $500 million acquisition of ITS ConGlobal, one of North America’s largest operators of intermodal railroad and auto terminals, container and yard depots, from previous owner, Carlyle Group, AMP Capital’s Dylan Foo describes the opportunities he’s seeing on the ground in the US.
Foo highlights less traditional infrastructure categories which he says require a different style of thinking than investors might have traditionally brought to the segment.
He describes ITSC essentially as the “lubricant” that makes the transport engine work.
Toll roads, bridges, schools and hospitals – assets once considered the bread and butter of infrastructure investors – are less sought after by investment firms seeking stable returns from real assets with monopolistic advantages over the long term, Foo notes.
Communications is one of the areas where the bounds of infrastructure investing are stretching, Foo outlines in this new whitepaper.
As the digital realm expands, cell tower technology, fibre optics, TV and radio digital broadcasting networks are among the assets finding their way into the field of vision and indeed into the portfolios of infrastructure funds, Foo explains, perhaps pointing to where the AMP Capital’s US infrastructure team might be scouting deals next.
“I call it 21st century energy… The power generation eco-system has developed and will increasingly rely on micro-grids and battery storage to manage energy requirements. That’s the way of the future, and is similar to the way renewables became mainstream from their infancy 30 years ago,” Foo says.
Assets of this nature are likely to be acquired and operated in a way that lends itself to a Private Equity style of investing, this white paper outlines.