214. Why infrastructure is crucial in the transition to net zero
Rebecca Myatt, a portfolio manager on the Elite Rated First Sentier Global Listed Infrastructure...
First Sentier Global Listed Infrastructure
First Sentier Global Listed Infrastructure fund seeks to deliver income and some capital growth by investing in listed infrastructure companies around the world. First Sentier Investors was one of the pioneers in providing access to this asset class, which quickly captured the attention of income-focused investors.
Previously First State Global Listed Infrastructure fund.
Our opinion
The First Sentier Global Listed Infrastructure fund is a recognised leader in listed infrastructure investment, benefitting from a strong team and a good long-term track record. Peter is one of the most experienced managers in the space and has been running this fund for over 15 years. This is an alternative method of playing the global equity market with a thematic bias and a reasonable yield.
Company description
First Sentier Investors is a global asset management group focused on providing high quality, long-term investment capabilities to clients. It brings together autonomous teams of active, specialist investors who share a common commitment to responsible investment principles.
The group offers a comprehensive suite of active investment capabilities across global and regional equities, cash and fixed income, infrastructure and multi-asset solutions, all with a shared purpose to deliver sustainable investment success. It has been managing money with this long-term outlook for more than 30 years.
The group was previously called First State Investments
Fund manager
The First Sentier Global Listed Infrastructure fund has been managed since launch by Peter Meany, a pioneer in infrastructure investment, who was previously an analyst at Macquarie and Credit Suisse. Peter holds a Batchelor Economics (Finance) from Macquarie University. Andrew Greenup was appointed co-manager in June 2011, although he is the co-founder of the strategy. Before joining the business in 2005, Andrew worked at Allianz Global Investors and Credit Suisse First Boston as an analyst. He holds a first class Batchelor degree in Business from the Queensland University of Technology among other qualifications. They are well supported by a team of seven analysts.
We aim to provide investors with a mix of strong capital growth and inflation-protected income by investing in a globally diversified portfolio of infrastructure securities.
Peter MeanyFund manager
Investment process
The managers are conservative investors, recognising that capital preservation is critical to achieving long-term capital growth. First Sentier Global Listed Infrastructure fund invests in ‘hard’ infrastructure such as bridges and ports around the world, via listed companies that own the assets. Of around 120 companies that the team has identified and monitor, 40 are included in the portfolio, comprising those that Peter and Andrew believe can earn returns above consensus expectations.
They prefer to invest in real infrastructure assets with barriers to entry and pricing power. They believe that for infrastructure to deliver its full potential, other crucial requirements are management alignment, independent boards, appropriate gearing, transparent regulation and cultures that are working to sustain their license to operate.
ESG
ESG - Limited
This fund has had some level of ESG considerations built into the investment process since 2007. This extends to covering ESG inputs for around a quarter of the quality assessment criteria though this does preclude any industry or sector. The fund’s investment universe does include an increasing weight towards renewable energy, decarbonisation of transport and hydrogen. However, the fund will also invest in oil & gas pipeline and storage as part of a diverse investment strategy, incorporating a balance of overall energy mix.
Risk
The infrastructure sector tends to be less volatile than the wider market. However, investors should not think of this fund as low risk. First Sentier Global Listed Infrastructure has historically been about as volatile as the average global equity fund.
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