There is little clarity on the depth of the recession or what a staged recovery looks like, and predicting the daily economic habits which may change structurally is highly speculative. Investors are examining portfolios and re-evaluating their allocations, asking how each asset exposure fits this environment.
In this economic maelstrom, however, the fixed and essential function of the listed infrastructure sector make it a resilient long-term investment. Moreover, the stock market downturn opens an opportunity as many listed infrastructure companies are mispriced, as we discuss in Section 1.
On a longer horizon, there are characteristics governing the asset class which give it global growth opportunities and a predictability of revenue. We explore this in Section 2. Earlier in the journal we discuss the creation of a de novo infrastructure investment trust (IIT), as recommended in the recent G20/OECD report, aimed at allowing private capital to help strapped governments build and maintain essential infrastructure post-COVID and into the decades ahead.
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Watch Portfolio Manager Nick Langley discuss the drivers of recent listed infrastructure performance and highlight how stabilising real yields and strong company fundamentals are improving the outlook for the asset class.Read full article