After screening for investible companies considered to deliver an infrastructure-like return profile, the investment process focuses on detailed due diligence facilitated by the large investment team, who conduct 500 meetings with company management as well as physical tours of company assets.
After scoring companies on 25 quality criteria specific to infrastructure stocks, the composite quality score is compared to a measure of how cheap or expensive the stock is, based on a discounted cash-flow model based incorporating near-term to longer-term growth forecasts as well as relative value metrics versus other stocks in their peer groups. Those looking the most attractive are built into a conviction-led portfolio, and they will try and keep the portfolio to 40 stocks, based on upside and how compelling they find the opportunity.
We like the fund due to its very well developed process and significantly experienced team, some of whom have worked in the sector since its creation in the 1990s. One of the first funds investing in global infrastructure equities, they have built one of the strongest track records in the sector, performing extremely well in up and down markets and with relatively low correlation to other asset classes, characteristics in which we view favourably in the sector.