How do we manage quality, income & risk in a bond portfolio?
We believe that quality and yield opportunities can still be found in bonds.
We share a perspective on sustainable and traditional infrastructure, and the opportunity set1 in the drive for sustainability.
Infrastructure in the traditional sense
Electricity networks, railroads and telecom towers would generally come to mind when investors think of infrastructure. Infrastructure can be defined as the set of fundamental facilities and essential assets that support the day-to-day functions of households, firms and society at large.
It is becoming increasingly challenging to employ a business-as-usual approach to investing in infrastructure, where some projects could lead to ecological concerns and increased carbon-dioxide emissions. This, coupled with changes in demographics and rapid urbanisation, are creating unique challenges.
In this regard, we see opportunities in infrastructure companies that align with sustainable investing goals and trends, such as environmental resiliency, social infrastructure and improved connectivity.
How we align infrastructure with sustainability2
As the world transitions to a low-carbon economy, traditional infrastructure business models such as gas infrastructure are relatively less attractive from a risk/reward perspective.
Instead, we believe there are unique opportunities in infrastructure companies that are striving to help build a more sustainable and inclusive economy. Such companies are better positioned as they provide solutions that help address megatrend challenges. For example, electrification is at the core of decarbonisation, and this has spurred the development of related assets such as electricity networks.
Additionally, we seek to capture growth opportunities in innovative infrastructure areas that leverage new technologies to buid a more sustainable future. For example, electric vehicle charging stations and battery storage are part of the infrastructure framework that helps drive electrification.
Changes in climate patterns are driving greater awareness to make our planet more liveable, presenting opportunities in infrastructure companies engaging in renewable energy, electricification and cleaner water.
Water network companies
Water treatment companies
Wind, solar and hydropower developers
Demographic shifts have driven demand in some social infrastructure, presenting opportunities in medical infrastructure, as well as social housing and education infrastructure.
Senior living providers
Social housing & education infrastructure
Affordable housing companies
Student accommodation providers
Additionally, the growth of megacities will require an uplift in technology to help improve connectivity, drive envinronmentally friendlier forms of transportation and improve logistics in the urban environment.
Data storage companies
Telecom tower operations
Sustainable railroad companies
Sustainable warehouse providers
Sustainable delivery companies