By ANNE ASHWORTH FOR THE DAILY MAIL 10 December 2021
The word ‘infrastructure’ carries a suggestion of solidity at an uneasy time. This is one of the reasons for the upsurge of interest in the sector, which encompasses bridges, hospitals, roads and schools, but also renewable energy generators and the data centres, fibre-optic networks and mobile towers that form the plumbing of the internet.
The transition to net zero will further broaden the scope of the 30 stock-market quoted investment trusts that specialise in infrastructure. Billions of pounds of public money will be made available to finance the green industrial revolution.
No wonder that a poll of money managers this week tipped renewable energy infrastructure to be the top performer in 2022.
Phil Kent, manager of the Gravis GCP Infrastructure trust, which backs renewables, schools and social housing, defines an investment suitable for an infrastructure trust as ‘a physical asset that provides a social purpose’.
He adds: ‘New classes of assets will emerge to deal with the challenges for society.’
The chance to have a stake in the mix of such new technologies and traditional schemes is appealing. But the income from these funds and trusts is also a lure. Yields of 4 per cent-plus are on offer.
Infrastructure trusts provide finance for projects and then charge the users over a period of ten years or more.
As James Carthew of analytics group QuotedData explains, these revenues are ‘contracted, predictable, often government-backed and inflation-linked’. This last feature is particularly attractive, given that Bank of England deputy governor Ben Broadbent now says inflation will ‘comfortably’ exceed 5 per cent by the spring of 2022.
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