M&G Investments, a leading international asset manager, today announces the launch of a global equity infrastructure fund which aims to provide investors with both a growing income stream and long-term capital appreciation.
"The fund will invest in companies which own and operate the infrastructure we have come to rely upon in daily life "
The fund will invest in companies that own or control critical physical infrastructure which supports global economic growth, and in businesses whose assets underpin the day-to-day functioning of society. Revenues from these types of businesses are often inflation protected, and the stable and growing cash flows they generate are typically available in the stock market with a higher yield and lower volatility compared to global equities.
The M&G Global Listed Infrastructure Fund, managed by Alex Araujo, has a total return objective, aiming to outperform the MSCI AC World Index over any five-year period, and seeking to deliver an income stream to unitholders that increases every year.
The strategy draws on a proprietary, global investment universe which offers depth and liquidity. The fund provides diversification by geography and by infrastructure class, but the fund manager goes an important step further. The traditional, core infrastructure definition is augmented by modern elements supporting an increasingly digital and connected world.
Alex Araujo, fund manager, says: “The fund will invest in companies which own and operate the infrastructure we have come to rely upon in daily life, including utilities, energy, and transport infrastructure. Due to their critical, essential nature, demand for these services tends to display resilience throughout the economic cycle.
"However, the infrastructure landscape has had to evolve to support the realities of modern-day life, which increasingly depends on digital services and high-speed connectivity. Accordingly, we broaden our investible universe to include an ‘evolving’ infrastructure class, which offers long-term structural growth and compelling investment opportunities for the fund.”
Graham Mason, CIO for M&G equity, multi-asset and retail fixed interest, says: “With rising inflation expectations in developed markets, investors are seeking global equity products which can offer diversification, an inflation-protected income stream, and strong long-term total returns. Combining Alex's experience with the breadth of M&G Group's infrastructure expertise, I am confident this fund will deliver an exciting new opportunity for our clients who seek cash flows that have the potential to grow over the long term."
Alex Araujo continues: “Investing in long-life businesses and physical assets requires a resolute focus on sustainability. As such, we explicitly integrate Environmental, Social, and Governance (ESG) considerations into our investment process. With infrastructure businesses increasingly accountable to multiple stakeholders on ESG-related issues, we seek to mitigate risk, preserve capital, and grow our clients’ savings over the long term”
The fund sits within M&G’s equity income team, overseen by Stuart Rhodes, manager of the M&G Global Dividend Fund, a top quartile performer since launch in 2008*.