FTF ClearBridge Global Infrastructure Income
This is a high yielding listed infrastructure fund managed by a team of sector specialists. The fund combines regulated utilities with demand-based infrastructure such as railways and roads. The fund is designed to provide a good income with stable growth and some inflation protection. The fund targets a yield of greater than 5%.
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Our Opinion
This fund has an excellent yield, great performance and is managed by an experienced team. The fund has delivered for investors since its launch and you would be hard pressed to find a more experienced team of infrastructure specialists. We particularly like the fund's track record of dividend growth on top of an already generous yield.
Fund Managers
Daniel Chu, Fund manager
There are four managers of the global infrastructure income strategy; Daniel Chu CFA, Charles Hamieh, Shane Hurst and Nick Langley.
Daniel Chu was previously an infrastructure adviser at KPMG and an infrastructure analyst at ANZ. Daniel joined the team in 2012.
Charles Hamieh has managed listed infrastructure for most of his career at various firms. He has 27 years’ experience and joined the team in 2010.
Shane Hurst was previously a portfolio manager at Tribeca Investment Partners and a director of infrastructure securities at Hastings Fund Management. He has 27 years’ experience and also joined the team in 2010.
Nick Langley has held a number of roles throughout his career and was previously principal of infrastructure fund management at AMP Capital. In 2006, he co-founded RARE which subsequently integrated with ClearBridge. Nick has been with the team since 2006 and has 30 years’ experience.
Charles Hamieh, Fund manager
Charles is a Portfolio Manager on all Global Infrastructure strategies at ClearBridge Investments. He joined ClearBridge in 2020 and the investment industry in 1997. Prior to joining ClearBridge, Charles was a Portfolio Manager and Senior Portfolio Analyst at RARE Infrastructure Limited, which became part of ClearBridge in 2020; Director and Senior Analyst covering global infrastructure securities at AMP Capital; Director, Infrastructure Securities at Hastings Funds Management; Head of Listed Infrastructure at Challenger Financial Services Group; Portfolio Manager at AMP Capital Investors; and an Analyst and Strategist at HSBC Australia. Charles received a Bachelor of Economics from the University of Western Sydney.
Shane Hurst , Fund manager
Shane is a Portfolio Manager on all Global Infrastructure strategies at ClearBridge Investments. He joined ClearBridge in 2020 and the investment industry in 1997. Prior to joining ClearBridge, Shane was a Portfolio Manager and Senior Portfolio Analyst at RARE Infrastructure Limited, which became part of ClearBridge in 2020; Director, Infrastructure Securities at Hastings Funds Management; Portfolio Manager and Investment Analyst at Tribeca Investment Partners; and an Investment Analyst at AMP Capital Investors. Shane received a Master of Commerce in advanced finance from the University of New South Wales and a Bachelor of Business from the University of Technology Sydney.
Nick Langley, Fund manager
Nick is a Portfolio Manager on all Global Infrastructure strategies at ClearBridge Investments. He joined ClearBridge in 2020 and the investment industry in 1995. Prior to joining ClearBridge, Nick was the Co-founder and a Senior Portfolio Manager at RARE Infrastructure Limited, which became part of ClearBridge in 2020; Principal of the Infrastructure Funds Management team at AMP Capital, where he was also the Chief Financial Officer of DUET Group, an ASX-listed investment trust; Associate Director, Investment Banking at UBS; and a member of the Manager, Mergers and Acquisitions team at BZW/ABN AMRO. Nick received a Bachelor of Laws and a Bachelor of Commerce from the University of Auckland.
Risk
The fund is limited to less than 5% in cash and is usually close to fully invested. The fund invests globally although exposure to developing markets is limited to a maximum of 20%. Exposure to any one stock, region or sector is limited to manage risk. The fund generally has a bias to more predictable regulated cash flows. The infrastructure sector tends to be less volatile than the wider market.
Company Description
ClearBridge is 100% owned by Franklin Resources, Inc., a global asset management firm. The company provides active asset management in many major investment centers throughout the world. Franklin Resources, Inc. is listed on the New York Stock Exchange.
ClearBridge traces its roots back over 60 years. In 2005, the firm was acquired by Legg Mason and renamed ClearBridge. This fund was originally part of specialist infrastructure manager RARE. Legg Mason acquired a majority equity stake of RARE in 2015 before RARE was integrated with ClearBridge in 2019.
In 2020 Legg Mason was acquired by Franklin Resources. Franklin Resources has preserved the autonomy of ClearBridge and it maintains investment independence. ClearBridge is a global equity manager with approximately $185bn under management.
Investment process
The fund’s philosophy is to take a very long-term approach with a focus on absolute rather than relative returns. The focus is on long-term cash flow generation and regulatory dynamics. The team seek to exploit the short-term focus of others to find asset mispricing. The process ignores any benchmarks and aims to provide long-term inflation-linked capital growth with a reliable income. The fundamental belief behind the fund is that infrastructure is fundamentally a less risky asset class compared to equities because it is providing essential services but can still deliver excellent returns.
Infrastructure sub sectors include gas and electricity; renewables and water utilities; toll-roads; airports; ports; rail; and communications.
The fund combines regulated utilities with demand-based assets such as railways or toll-roads. The investment process is predominantly bottom-up with investments made across the world. However, the process is sufficiently flexible so as to incorporate the macroeconomic environment into the portfolio construction process. Companies must also have a dividend of at least 2.5% and sufficient liquidity.
The final portfolio has about 40 holdings.
Risk
The fund is limited to less than 5% in cash and is usually close to fully invested. The fund invests globally although exposure to developing markets is limited to a maximum of 20%. Exposure to any one stock, region or sector is limited to manage risk. The fund generally has a bias to more predictable regulated cash flows. The infrastructure sector tends to be less volatile than the wider market.
ESG
ESG - Integrated
The team believes net zero targets provide opportunities for infrastructure investors. ESG is fully incorporated into the fundamental research process. Sustainability analysis increases or decreases the real required return on investments. The firm incorporates third-party ESG research alongside its own internal research. The firm promotes sustainability during company meetings and has over 1,000 of these engagements with companies every year. Research analyst compensation incorporates the assessment of ESG factors and company best practices.
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