Investment trust insider on two new infrastructure funds – James Carthew: Alinda, Pantheon are good additions to booming infrastructure
Governments around the world see infrastructure investment as a way of injecting new life into their economies in the wake of the disruption of the pandemic. Couple that with the investment needed to meet their promises on climate change and the numbers being bandied around for infrastructure investment are vast.
Shares in the existing listed infrastructure funds tend to trade on big premiums above net asset value (NAV). The attraction is usually reckoned to be a decent level of income, a high proportion of inflation-linked, predictable, contracted and defensive revenues, and often government-backed cash flows.
The infrastructure sector appears to be booming. The successful launch and subsequent expansion of two digital infrastructure funds earlier this year added over £1.3bn to the sector. Now two more funds hope to join the party – Pantheon Infrastructure (PINT) is looking to raise an initial £300m and Alinda Capital Infrastructure Investments (AC2) hopes to raise £350m. Both funds can point to managers with significant experience and good track records.
Although the two new entrants are quite different, both told me their funds would be closer to 3i Infrastructure (3IN) than the other existing constituents of the sector. Alinda says that, like 3i Infrastructure, it will be more of a hands-on investor in operational businesses. Pantheon’s angle is that like 3i Infrastructure, it will have a diversified portfolio encompassing many different types of infrastructure. It hopes to identify assets where there is scope to add value as well as collect an income.
3i Infrastructure is the best-performing of the existing infrastructure funds by some distance, but… read more here