Our investment philosophy

Our investment philosophy is based on the following key principles:

We are bottom-up stock pickers

The investments that interest us most are often trading below our assessment of their underlying value because some development has caused the market to regard the immediate prospects as poor. We consider a narrower range of “core” infrastructure assets compared to many other fund managers and infrastructure indices.

We invest for the long-term

We believe that rigorous analysis of fundamentals and valuation is necessary to find the best listed infrastructure investment opportunities globally. We forecast key financial variables over at least a ten year time horizon. The holding period for stocks in the portfolio is expected to average approximately four years.

We are focused on inflation protection and lower volatility

Our focus is on global listed infrastructure companies that have a high degree of inflation protection, low cash flow volatility and strong corporate governance and management expertise and alignment.

We are macro-risk aware

Whilst we are primarily a bottom-up and valuation driven investor, we do place an emphasis on macroeconomic research as it provides key inputs into our valuations and it is also utilised as a risk mitigation tool. Macroeconomic risks are ever present in a global asset portfolio and we seek to reduce these risks where possible.


Global Listed Infrastructure
Investment philosophy and process


Our investment approach

We are bottom-up stock pickers. We initially screen stocks globally with the strongest infrastructure characteristics. 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.

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.

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.

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.