Following a decade of significant expansion, there are several indicators the listed infrastructure sector still has a long runway for growth, says Andrew Maple-Brown, Co-Founder and Managing Director, Maple-Brown Abbott Global Listed Infrastructure.
Assets under management in listed infrastructure worldwide rose from US$27 billion in 2012 to US$145 billion in 2021, according to Global Listed Infrastructure Organisation (GLIO) data, with the total number of global listed infrastructure managers doubling to approximately 60 over the same period.
“This is a dramatic increase and attests to the growing recognition by investors of the role that infrastructure can play in a portfolio, including through its inflation protection, income yield and reduced volatility characteristics when compared to global equities, and the diversification benefits that it can provide a portfolio,” Mr Maple-Brown said.
“We believe this growth will continue and that global listed infrastructure will become a growing allocation within investment portfolios. GLIO projections suggest we could see funds under management in the sector grow to around US$350 billion in 2030.”
Mr Maple-Brown said there were several factors supporting the sector’s growth including the need for infrastructure to support the energy transition, the electrification of society and digitalisation, and the shortage of infrastructure globally. Central to all these themes is the integration of environmental, social and governance (ESG) research and company engagement to manage risks, identify opportunities and drive better long-term outcomes.
Commenting on the portfolio, Mr Maple-Brown highlighted that the team are currently seeing good opportunities globally in toll roads and telecommunication tower companies. “We view these two sectors as offering some of the highest quality infrastructure assets, yet for different reasons we have recently seen certain such assets trading at significant discounts to our valuations. Interestingly, we have not seen a corresponding softening of values for these assets in the direct infrastructure market, reflecting a divergence between the markets.”
The Maple-Brown Abbott Global Listed Infrastructure strategy celebrates its 10-year anniversary on 17 December 2022.
Reflecting on the past 10 years, Mr Maple-Brown said the early years of establishing a funds management business is challenging, but as well as the growth in the sector, the team had been fortunate to be in the company of strong Australian peers.
“The quality of Australian infrastructure managers has drawn capital from all parts of the world to be managed domestically. Partly as a result of this we have a diverse client base both onshore and offshore, reflecting the global demand for defensive infrastructure investments with stable cashflows and inflation linkages.
“It has been an eventful decade and we are hugely thankful for the support of investors, advisers, researchers and consultants, both in Australia and offshore, and to our talented and dedicated team.,” Mr Maple-Brown said.
In 2022, Maple-Brown Abbott Global Listed Infrastructure was named winner of the Global Listed Infrastructure category in the Zenith Fund Awards (14 October). The Maple-Brown Abbott Global Infrastructure Fund, a UCITS fund not available in Australia, which has investors based in Europe, North America and Africa, won the ‘Infrastructure Fund of the Year’ category in Environmental Finance’s 2022 Sustainable Investment Awards (29 June).