Market update

Equity markets continued to rise in the first quarter of 2021, with global equities (in USD terms) up 4.9%. Listed infrastructure also saw positive performance, with the FTSE Global Core Infrastructure 50/50 Index (USD) up 4.1%. 

As we wrote last quarter, the listed infrastructure sector significantly underperformed broader equities during 2020, notwithstanding that for most companies there was little or no impact to earnings from COVID-19.  The transportation infrastructure holdings, which currently make up approximately 25% of the strategy, understandably suffered earnings hits of varying duration. The listed infrastructure sector’s material underperformance continued in January and February, before a strong relative performance by the sector in March. 

Within the infrastructure sector there was generally less variance in returns this quarter than previous quarters – except that North American pipelines were strong and some transportation infrastructure stocks were weak. It was notable that while bond yields rose sharply during the quarter, there was little differential between the most and least interest rate sensitive infrastructure sectors. This could reflect that the interest rate sensitive companies had become particularly cheap during 2020.     

Looking forward, we are of the view that valuations are at least fair within the asset class and are attractive relative to both broader equity markets and where infrastructure assets are traded at in direct markets. We continue to view infrastructure assets as offering key characteristics for long-term investors including an attractive dividend yield, lower cashflow volatility and portfolio diversification benefits. We expect the demand for investments with such attributes will only continue to grow.

Thank you for your continued support of our strategy.

Portfolio discussion

At 31 March 2021 our Global Listed Infrastracture strategy(1) held 32 high quality infrastructure securities across 14 countries. 

The largest individual country exposure remains the United States of America at 48%, which had decreased over the quarter. The United Kingdom (12%) was our next largest, followed by France (9%), which were both little changed over the quarter.

From a sector perspective, our largest holdings continue to be in regulated assets (54%), which decreased slightly over the quarter. Our holdings of contracted assets were unchanged at 20%, while our transportation concessions (such as airport and toll-road assets) increased to 22%. 

The investment team is continually looking on a bottom-up basis for further attractive investment opportunities to add to the portfolio. We expect this will result in a fairly low level of portfolio turnover as individual stocks fluctuate between being over-sold or over-bought.

(1) Maple-Brown Abbott representative account.

Performance contribution (USD)

Best contributing stocks%
Worst contributing stocks%
Williams Companies0.59
Cheniere Energy0.52
Edison International-0.21
Kinder Morgan0.49
Aleatica Mexico SAB de CV-0.09
Crown Castle Intl Corp0.38
SJW Group-0.08
Duke Energy Corp0.38
CPFL Energia-0.07

Principal transactions

The main purchases and sales in the Portfolio during the quarter were as follows:

Infrastrutture Wireless Italiane SpAAllete
Ferrovial SACheniere Energy
Transurban GroupWilliams Companies
Entergy CorpCrown Castle Intl Corp
Sempra EnergyFraport

Top ten holdings

SecurityPortfolio %
Duke Energy Corp6.28
Sempra Energy5.05
Ameren Corporation5.00
American Electric Power4.71
National Grid4.56
Crown Castle Intl Corp4.15
Severn Trent4.01

Analysis of portfolio

The value and balance sheet characteristics of the strategy as at 31 March 2021 are as follows:

Number of Stocks32
Dividend Yield (%)3.7
EV/EBITDA* (%)14.1
Gearing (net debt/EBITDA)(x)5.4

*Enterprise Value/Earnings Before Interest, Taxes, Depreciation and Amortisation

These figures are based on estimates for the next twelve months which include assumptions that may not hold true. Actual outcomes may differ. Source: Maple-Brown Abbott Ltd internal estimates, Sentieo, and Bloomberg.

Country and sector weightings

The country and sector weightings (%) in the strategy are as follows:

Selected infrastructure news items

  • In January, US President Joe Biden signed an executive order to revoke a Presidential Permit granted under the Trump administration for TC Energy’s Keystone XL pipeline. Keystone XL was planned as a 1,947-kilometre pipeline capable of transporting 830,000 barrels per day of crude oil from Hardisty, Alberta to Steele City, Nebraska. The project had an estimated cost of $8 billion and had secured financial support from the Alberta Government via a C$1.5 billion equity investment and a C$6 billion loan guarantee. Numerous stakeholders in the project continue to explore various options to restore the project. Relatedly, Biden also signed an executive order restricting the permitting and issuance of new oil and gas drilling leases on federal lands for a period of 60 days. The moratorium expired on 20 March, and well permitting has resumed at a slower pace.
  • On 28 January, strategy holding Duke Energy announced it had entered into an agreement with Singaporean sovereign wealth fund GIC to sell a 19.9% minority interest in Duke Energy Indiana for cash proceeds of $2.05 billion. Proceeds from the transaction will be used to help fund Duke Energy’s $58-60 billion capital plan, addressing all the company’s equity needs for the next five years. On 22 February, strategy holding Kinder Morgan and Brookfield Infrastructure Partners announced they would be selling a joint 25% interest in the Natural Gas Pipeline Company of America (NGPL) to ArcLight Capital Partners for cash proceeds of $830 million. Upon the transaction closing, both partners will continue to hold 37.5% in NGPL and Kinder Morgan will continue to operate the pipeline.
  • On 18 February, following a competitive bidding process, a consortium comprising strategy holding Transurban and Macquarie Capital (Accelerate Maryland Partners) was selected as the Phase 1 developer of the Maryland Express Lanes project connecting North Virginia and Maryland. Phase 1 of the project (also known as the American Legion Bridge I-270 to I-70 Relief Plan) is expected to cost
    $3-4 billion. The total expected cost of the Maryland Express Lanes project is over $9 billion.
  • On 2 March, after a detailed analysis of UK gas and electricity regulator Ofgem’s RIIO-2 Final Determination, strategy holding National Grid decided it would submit a technical appeal to the UK Competition and Markets Authority (CMA) in response to Ofgem’s proposed cost of equity and outperformance wedge for its electricity and gas transmission businesses. If accepted, the appeal is expected to be a six-month-long process beginning in April. Separately, on 18 March, National Grid also announced it would acquire Western Power Distribution (WPD), PPL Corporation’s (PPL) UK electricity distribution business, in an all cash transaction valued at £14.4 billion (including £6.6 billion of debt). As part of the transaction, PPL also agreed to acquire The Narragansett Electric Company (‘NECO’) from National Grid for $5.3bn (including $1.5 billion of debt). In conjunction with these two transactions, National Grid also announced it would commence a sale process later this year for a majority stake in its UK natural gas transmission business. Together, these transactions aim to strategically pivot National Grid’s UK portfolio more towards electricity.

Stock research and investment process

The Maple-Brown Abbott Global Listed Infrastructure (MBA GLI) strategy is focused on investing in core infrastructure assets that can best deliver investment return profiles that demonstrate a strong combination of low volatility of cash flows and good inflation protection. Companies that meet this narrow definition of infrastructure qualify for inclusion on the Focus List (the strategy’s investible universe of around 110 companies with a total market cap of around US$2.2 trillion). The Focus List has historically displayed lower levels of volatility relative to broader infrastructure indices and global equities. 

In this section, we demonstrate our investment process by highlighting how Cheniere Energy has evolved from being a non-core infrastructure company to moving onto the fringes of the Focus List and eventually becoming a modestly sized investment in the portfolio.

Focus List consideration

Cheniere was founded in 1996 initially as an oil and gas exploration business before beginning construction of a regasification facility to import LNG. In the early 2010s, in response to the US shale boom, the company then shifted its focus to adding liquefaction capabilities to enable LNG export from the contiguous US. In 2016, the company produced its first LNG cargoes from its first two LNG trains at its Sabine Pass facility and continued to push forward plans to add capacity through another five trains(2). At this stage, Cheniere was very much considered as non-core infrastructure as it was still in the early stages of its development, with limited earnings from its operational trains, very high leverage and a lot of uncertainty around the success of its future development plans, all contributing to high volatility of cash flows.

By late 2018, Cheniere had completed an additional two trains and was nearing completion of a further three, which together significantly de-risked the business from being a developer to the largest owner and operator of US LNG export capacity. Once operational, each LNG train is significantly underpinned by long-term contracts (typically 20 years) comprising of a fixed, take-or-pay fee component (with some inflation escalators) and a variable component reflecting the cost of sourcing the gas plus a spread (if the LNG cargo is lifted by the customer). As a result, the company is not exposed to fluctuations in commodity prices and is able to generate a stable fixed cash flow stream regardless of whether or not LNG cargoes are lifted by customers.

The stability of Cheniere’s operating cash flows is partly offset by the fact that the company continues to have very high levels of debt as a result of its huge capital investments and its ongoing development. Net debt to EBITDA was around 10x in 2018 relative to other North American midstream companies that were generally in the range of 4-6x at the time. As the remaining trains in development enter commercial operations, net debt is expected to fall quickly to below 6x EBITDA by 2022. On balance, the MBA GLI Investment Committee decided that while the company appeared to be on the fringes of the Focus List, the good visibility to a sustainable low volatility business and its moderate inflation protection was sufficient for it to be included on the Focus List as of 31 December 2018.

Investment opportunity

The onset of the COVID-19 pandemic in early 2020 presented a very attractive opportunity to initiate a position in Cheniere Energy in the portfolio. While global equity markets had sold off sharply, Cheniere was particularly hard hit because of the added uncertainty around how the LNG market would hold up through a pandemic. Concerns at the height of the pandemic were focused on 1) force majeure risk – in which a pandemic could allow customers to break their long-term contracts with Cheniere; 2) counterparty credit risk – the risk of customers defaulting on contractual payments; and 3) the perceived global oversupply of LNG. In our analysis of the stock, we focused our attention on gaining comfort around these risks in light of the challenges presented by the pandemic.

We gained confidence that Cheniere’s long-term contracts were very solid, and while they may be tested throughout the pandemic, we expected them to hold up in court. In our conversations with management they assured us the contracts were tight and were deliberately written in a way to provide customers with flexibility to take (or not take) cargoes on a Free On Board (FOB) basis for delivery anywhere in the world. This meant that there was less flexibility for customers to claim force majeure by arguing that there was no end-market for the LNG. We verified these claims by going through the publicly disclosed contracts that Cheniere had signed with some of its largest customers in detail. We also sought the qualified opinion of lawyers who specialised in LNG contracts. We gained comfort around the fact that any potential disputes would be dealt with fairly through New York State law (or London law in some cases) and International Arbitration Rules of the American Arbitration Association.

We were also satisfied about Cheniere’s low risk exposure to customer defaults as long-term contracts which were sufficiently diversified across a large number of investment grade customers – predominantly state-owned entities and oil supermajors. We did not view the pandemic as significantly altering the long-term global demand for LNG. Many independent studies continue to point to the ongoing need for cleaner fuels, such as natural gas, alongside stronger growth in renewables to help decarbonise economies over the next few decades. The current supply of LNG falls short of meeting future demands according to most forecasts. We also viewed the Cheniere management team as strong given its execution track record of delivering projects ahead of schedule and on budget, particularly during a period where other LNG projects were delayed and having operational issues.

At the height of the pandemic, Cheniere traded at below $30 per share – well below broker and our estimates of the company’s ‘run-off’ value (the intrinsic value of existing long-term contracts) of ~$45 50 per share, and well below our valuation of the entire business using a Dividend Discount Model. At these levels, the stock was also trading as low as 10x EV/EBITDA, relative to comparable private asset sales at 12x EV/EBITDA at the end of 2019. As a result of our strong conviction in the stock, but its slightly weak volatility and inflation protection, we initiated a 1.0% position in Cheniere in April 2020.

Performance through the pandemic

One year after the COVID-19 outbreak was declared a pandemic and initiation of our position in Cheniere, the LNG market has very much stabilised now. The pandemic saw a temporary oversupply of global LNG, pushing down spot prices in Asia and Europe to record low levels and resulting in a large number of cargo cancellations across US LNG terminals. Cheniere’s contracts held up well with no counterparties claiming force majeure nor defaulting on any contractual payments, and while some cargoes were not lifted, earnings remained stable. In fact, the pandemic had caused the delay or cancellation of many global LNG supply projects, which arguably increases our confidence in the long-term value of Cheniere’s existing facilities and potential growth projects.

Throughout the disruption caused by the pandemic, the company continued to execute well operationally. Its current development projects have also progressed, with Corpus Christi Train 3 reaching substantial completion ahead of schedule and Sabine Pass Train 6 on track for completion in the first half of 2022. The company continues to optimise capacity on its existing trains, increasing per train output by 12% since 2017, and it has been able to sign new medium-term contracts to improve its earnings stability.

We continued to increase our position in Cheniere throughout 2020 as LNG markets recovered, as we gained better confidence around the stock’s risks and as the stock continued to look cheap relative to our valuation.

(2) A Train is a plant's liquefaction and purification facility which converts natural gas to LNG.

Timeline of Cheniere Energy investment process

Source: Cheniere Energy, FactSet, MBA GLI

ESG integration

While climate risk and emissions management have been a focal point of our ESG research and company engagement in recent months, we have also been paying close attention to how companies are managing modern slavery risks and addressing diversity issues such as gender pay gaps.

Modern slavery

The rise of modern slavery(3) and supply chain legislation in recent years has been met with growing pressure on companies to take accountability for modern slavery issues in their supply chains and workforce(4). Today it is estimated that more people are in slavery-like situations than at any other point in history, with approximately 40 million people in slavery worldwide(5).  Over the quarter, we engaged with Severn Trent, Transurban and Ferrovial on how they manage modern slavery risks in their workforce and supply chains. All three companies are inherently “lower risk” due to the nature and location of their operations. In other words, water utilities and transport infrastructure companies in countries such as the UK, the US and Australia typically hire highly skilled people and are subject to robust labour laws.

Transport infrastructure companies, such as Transurban and Ferrovial, sometimes use labour hire firms to appoint contractors and sub-contractors for projects. From a modern slavery perspective, this can mean the company is at an ‘arm’s length’ from the worker and may not have full oversight of the contractual arrangements in place. When meeting with these companies, we sought to understand their due diligence of labour hire firms and whether they extend whistleblower and work, health and safety policies (among other guarantees) to their full workforce. These measures can help mitigate risks such as ’wage theft’, which is a problem even in developed countries.

All three companies we recently engaged with demonstrate good supply chain practices, but progress is needed to strengthen their oversight of indirect suppliers (eg. where a US-based safety uniform supplier may be sourcing from a garment manufacturer based in a high-risk country, such as Bangladesh). We also provided feedback that supply chain due diligence should be dictated by the level of risk as opposed to size of spend, as recommended by the UN Guiding Principles on Business and Human Rights.

Gender pay gap

Despite significant advancements in gender equality and mandatory company reporting on gender pay discrepancies in recent years, a sizeable gender pay gap still exists today. We believe gender diversity underpinned by inclusive policies and equal pay leads to higher quality and better managed companies over the long term. In the case of Ferrovial, significant work is needed across the group, with women paid less than men in every single like-for-like role across its Spain, UK, US/Canada, Poland, Chile and Portugal operations. In March 2021, we spoke with senior management at Ferrovial about the potential cultural, structural and industry-specific drivers and its plan to rectify discrepancies. This remains an ongoing piece of engagement.

At Severn Trent, we were pleased to see the male to female hourly wage gap on a mean (9.3%) and median (2.3%) basis improve steadily year-on-year since 2017. In saying this, the bonus pay gap remains large at 57%. This can be explained in part by the fact that women occupy fewer executive management and senior management roles compared to their male counterparts – something we continue to engage with Severn Trent on. Pleasingly, Transurban is one of the better performing portfolio companies on pay equity, with a pay gap of less than 1% between men and women in like-for-like levels of seniority across its Australian operations. 

Notable outcomes and proxy voting

We saw a number of positive ESG developments among portfolio companies over the quarter. Notably, AEP revised its commitment to reduce carbon emissions by 80% by 2030 (compared to 2000) and achieve net zero emissions by 2050 for electricity generation. Equally, in the case of Ferrovial, we were pleased to see the company’s proposal to align a portion of executive management’s long-term variable remuneration with ESG outcomes in its 2021 AGM proxy voting register. This was something we had previously engaged with Ferrovial on, and as such, we voted in favour of the proposal. To that end, it was a light quarter for proxy voting activity. We voted for all company resolutions and did not abstain from any votes. We expect proxy voting activity to pick up in the next quarter.

(3) “Modern slavery” is an umbrella term for different forms of human exploitation such as child labour, forced labour, human trafficking, and debt bondage.
(4) Such legislation exists in countries such as the UK, Australia, California.
(5) Walk Free Foundation, Global Slavery Index 2018.

Proxy voting activity

We engage the services of an independent Proxy Advisory to help inform, but not dictate, our decision making. Where we vote against a company resolution, we advise the company management prior to the AGM or EGM with our rationale for doing so. Over the quarter, we voted on all resolutions and did not abstain from any votes; 77% of votes were in favour and 23% were against. Where we voted against, our concerns mostly related to proposed remuneration amendments and cumulative voting measures.

Inflation review

In recent months, nominal interest rates have started to move higher reflecting that the upside risks to future inflation outcomes have increased. We continue to see core inflation outcomes remaining low in the near term but agree the risks to higher inflation outcomes in several economies, particularly in the US, have moved incrementally higher due to the ongoing large fiscal stimulus and accommodative monetary policies. The timing and ability to achieve higher inflation outcomes in line with central banks’ targets will (among many factors) also crucially depend on the consumption behaviours of households in the years ahead.

Stronger consumer spending is necessary to support a rebound in aggregate demand during the economic recovery to close the output gap and ultimately lift inflation. However, the strength of consumer spending is highly uncertain and inherently difficult to predict.

The ability for households to spend once the pandemic is over is significant. The large amounts of government support made to households and the limited consumption opportunities throughout the pandemic have meant that households, in aggregate, have now accumulated significant amounts of excess savings. This unique combination of factors throughout a downturn can provide a very strong foundation for a strong economic recovery and inflation in the years ahead.

Although there are slight differences in measures, estimates of the accumulated stock of excess savings by households since the onset of the pandemic are large by historical standards and range from around 10‑15% of GDP in some of the major developed economies. For example,

  • In the US, the Federal Reserve Bank estimated that households had accumulated US$2.1 trillion in savings at the end of 2020 (~10% of GDP)(6).
  • In the UK, the Bank of England (BOE) estimated the stock of excess savings accumulated by households was approximately £125 billion in November 2020 and could reach £300 billion by the time restrictions are fully lifted (~15% of GDP)(7).
  • In Europe, the European Central Bank estimated the stock of excess savings accumulated reached €300 billion in Q3 2020 (~10% of GDP)(8).

(6) Brainard L (2021), ‘Remaining Patient as the Outlook Brightens’, Speech at the National Association for Business Economics Virtual 37th Annual Economic Policy Conference, Washington, D.C., 23 March.
(7) Haskel, J (2021), ‘Remarks on challenges to the economic outlook’, Panel remarks at the CEPR/Chicago Booth Webinar, 5 March.
(8) Schnabel, I (2021), ‘Paving the path to recovery by preserving favourable financing conditions’, Speech at NYU Stern Fireside Chat, 25 March.

However, central banks have been cautious in interpreting these developments as a clear signal of higher future inflation. This is because previous increases in household savings rates and wealth have not necessarily been good predictors of future consumption behaviour. In fact, the BOE’s central projection going forward is for households to spend around 5% of the excess savings accumulated throughout the pandemic.

As economies recover from the pandemic, there will likely still be a lot of spare capacity that may take some time for aggregate demand to catch up. As a result, the initial run-down of households’ accumulated savings may not have a meaningful impact on inflation if it cannot be sustained. In addition, the ongoing uncertainty around potential future virus outbreaks, the sustainability of high accumulated financial debt during the crisis and the general economic outlook may discourage high levels of consumer spending.

The potentially limited impact is also perhaps made worse by the fact that in some cases the bulk of savings have disproportionately accrued to higher-income households who are likely to have lower propensities to consume than lower-income households. Higher-income households are reportedly also likely to have increased or brought-forward purchases of durable goods during the pandemic, which may see reduced demand for these products going forward.

The unique nature of these risks means that inflation outcomes are likely to differ across economies due to the differing fiscal and monetary policies and consumer behaviours, which will be influenced by a multitude of factors including the success of containment measures and the effectiveness of vaccine rollouts. In this regard, the US appears to be well-positioned to experience higher sustained inflation, while others such as Europe and Japan appear to be more structurally challenged.

At this stage, it is still not clear what lasting impact the pandemic will have on the number of long-term unemployed going forward. If sustained for some time, it could lead to adverse impact on economies through higher unemployment rates and the potentially deflationary pressure on prices. Unfortunately, monetary policy is somewhat limited in its ability to reduce the level of long-term unemployment, which places greater importance on fiscal policy measures to drive the post-pandemic economic recovery.

Economic review(9)

The MSCI AC World Index gained 4.6% in USD terms over the March quarter with major equity markets supported by resilient corporate earnings. The US, Japanese and UK markets gained 5.4%, 8.7% and 5.2%, respectively, in local currency terms, while China finished the quarter in line with December 2020. Bond markets softened amid expectations of strengthening inflation.

Global industrial production recovers from the depth of the pandemic, supporting elevated commodity prices

Source: IMF

The International Monetary Fund (IMF) revised its 2021 world output growth projection to 5.5%, an increase of 0.3%, reflecting benefits from the vaccine rollout and additional policy support in the US and Japan. The growth rate of -3.5% for 2020 was revised upwards by 0.9%, assisted by a recovery in global industrial production. Stronger economic conditions were reported in the second half of the year across countries such as the US, Japan, India, Australia and Korea. The outlook remains uncertain with renewed lockdowns and virus mutations impacting various regions across the world.

US momentum continued with GDP increasing by 4.3%. Exports, fixed investment and consumption were key growth drivers, while government expenditure fell by 1.2%. Personal savings remained high at 13.4%. President Joe Biden announced a $1.9 trillion COVID relief package consisting of individual cash payments, extended jobless benefits, local government support, business support and spending on health and education. At the end of the quarter, the president also detailed a potential $2 trillion plan to rejuvenate public infrastructure funded by an increase in corporate taxes. While inflationary pressures may increase from such significant stimulus packages, a sustained reduction in unemployment is a necessary precursor to material wage inflation. The Federal Reserve kept rates unchanged during the quarter and expects rates to remain close to zero during the next two years.

Economic activity across Europe was impacted by lockdown measures following renewed virus outbreaks. GDP grew by just 1.3% in the UK and 0.3% in Germany, while France declined by -1.4%. Business investment and net exports remained strong in France, yet a reduction in consumer spending by 5.4% hampered the economy. Despite holding two consecutive quarters of growth, GDP in the UK remains nearly 8% below 2019 levels. The Bank of England kept policy rates unchanged during the quarter. While monetary policy expectations do not foresee the need for negative interest rates, the Bank of England announced the intention of adding negative interest rates to its ‘policy toolkit’ (giving the banking system six months to update IT systems to cater for sub-zero interest rates). Meanwhile, the European Central Bank signalled an increase to its asset purchasing program for the coming quarter and highlighted that monetary policy will remain restrained in light of inflation volatility.

Conditions in China remained steady with GDP growth of 2.6%. Government stimulus and export growth continued to drive strong levels of industrial production, in turn supporting elevated commodity prices. However, consumption per capita was weak, falling 4% during 2020. Growth in Japan remained strong with GDP increasing by 2.8%, almost returning to pre-COVID levels. Government handouts and employment protection subsidies helped to keep unemployment low and consumer confidence robust. Economic activity in India also approached pre-pandemic levels with strong GDP growth of 7.9%. Private sector and manufacturing strength helped to offset some weakness in public administration spending.

GDP growth in Australia remained resilient, increasing by 3.1%. Household spending grew by 4.3% and favourable weather conditions led to a 27% increase in agricultural production values. Employment rebounded to around half a percent shy of pre-COVID levels, with the Reserve Bank of Australia (RBA) anticipating limited negative impact from the end of the ‘Job Keeper’ program in March. The RBA completed just over two-thirds of its initial $100b asset purchase program with another $100b to be purchased from mid-April. Weak net population migration is expected to provide headwinds for construction and the economy in coming years. The RBA noted unemployment would need to be materially lower than current rates to result in wage growth above 3% and, in turn, sustainable inflation in the targeted 2-3% range. Based on this outlook, the RBA reaffirmed the current 0.1% cash rate target was likely to be in place until 2024.

(9) GDP data is based on December quarter-on-quarter growth rates.

This document is issued by Maple-Brown Abbott Limited ABN 73 001 208 564, Australian Financial Services Licence No. 237296 (“Maple-Brown Abbott”). The information in this document is intended solely for professional investors and is not directed at any person in any jurisdiction where the publication or availability of the information is prohibited or restricted by law. Information in this document is for information purposes only and does not constitute an offer or solicitation by anyone in any jurisdiction. Nothing contained in the document constitute financial, legal, tax or other advice of any kind. This document is not, and must not be treated as, investment advice, investment recommendations, or investment research. Before making any investment decision, you should seek independent investment, legal, tax, accounting or other professional advice as appropriate.

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The Global Listed Infrastructure Composite includes accounts that invest in global listed infrastructure securities with a focus on regulated, contracted and concession assets or networks that provide essential services. The objective is to outperform the index over rolling five year periods. Portfolios are concentrated and typically hold between 25-35 stocks. Returns are presented gross of management fees and custodial fees but net of all trading expenses and withholding taxes. Past performance is not a reliable indicator of future performance. Investments are subject to investment risk including possible delays in repayment and loss of income and principal invested. Neither Maple-Brown Abbott nor any of their related parties, directors or employees, make any representation or give any guarantee as to the return of capital, performance, any specific rate of return, or the income tax or other taxation consequences of, any investment. Any comments about individual stocks or other investments are not a recommendation to buy, sell or hold. Any views expressed on individual stocks or other investments are point in time views and may be based on certain assumptions and qualifications not set out in part or in full in this information. Information derived from sources is believed to be accurate, however such information has not been independently verified and may be subject to assumptions and qualifications compiled by the relevant source and this paper does not purport to provide a complete description of all or any such assumptions and qualifications. The standard management fee in USD for Global Listed Infrastructure accounts is 0.75% for first the $50 Million, 0.65% on the next $150 Million and 0.55% of the balance. The minimum portfolio size for inclusion in the composite is AUD 5 million. A list of all composite descriptions is available upon request.

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