Investment opportunities in global infrastructure set to expand significantly, says Russell Investments
Russell Investments launches new Russell Global Listed Infrastructure Fund – A$ Hedged for retail and institutional investors
Current economic conditions provide solid platform for investing in alternative assets
SYDNEY, 28 September 2009 - Investment opportunities in global infrastructure are set to expand significantly according to visiting US expert Bruce Eidelson, Director of Real Estate Securities at Russell Investments. According to Mr Eidelson, the need to upgrade infrastructure in developed markets and expand infrastructure in developing markets is catalysing growth in utilities, transportation and communications sectors.
Speaking with institutional managers and investors this week, Mr Eidelson said Russell expects to see a dramatic increase in the number of retail and institutional investors seeking access to alternative assets such as global infrastructure in the coming years.
In response to this demand, Russell Investments has today launched the new Russell Global Listed Infrastructure Fund – A$ Hedged (the Fund) which gives both retail and institutional investors exposure to a diversified range of 100-125 individual global listed infrastructure securities. The Fund offers investors exposure to one of the widest ranges of sectors and geographies available in the market.
Mr Eidelson said listed vehicles were proving popular with investors globally as they provide greater liquidity and transparency, are high-yielding and typically have lower management fees than direct assets.
“The current market environment presents compelling investment opportunities in alternative assets. In particular, global listed infrastructure is currently a very attractive opportunity for investors seeking stable income from tangible or ‘real’ assets. It is also a prudent exposure for those investors wanting to diversify a multi-asset portfolio,” said Andrew Sneddon, Portfolio Manager, Russell Investments.
Russell Investments has appointed US global listed infrastructure experts FAF Advisors as the investment manager in the Global Fund – the first time FAF Advisors will be available to local investors.
The new Fund forms part of Russell’s continuing commitment to alternative investment opportunities and is the first of a suite of new alternative investments that will become available to retail and institutional investors through the Russell Diversified Funds over the coming months.
Why infrastructure? Why now?
Infrastructure investing is defined as investing in assets that provide services that are essential for a functioning economy. The services provided are typically monopolistic or quasi-monopolistic in nature as a result of geography or regulation. Demand for these services is often inelastic to price changes and Mr Eidelson believes these investments can still provide predictable and sustainable cash flows in the post-global financial crisis world.
The Organisation for Economic Co-operation and Development estimates that around US$40 trillion of investment in new and existing infrastructure will be required globally between now and 2030. The trend for governments around the world to embrace the financing of public infrastructure by the private sector is creating vast opportunities for investors to address funding shortfalls and to support economic development in both developed and developing countries.
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