The listed infrastructure universe continues to grow and was estimated at more than US$2.4 trillion as at Dec. 31, 2010, according to Standard & Poor’s Fund Services’ Listed Infrastructure Sector Report published today.
Over the past year, strong performance has been rewarded by positive flows despite investors being generally nervous to re-enter other listed markets.
“Growth continues to come from an international trend to private ownership and management of these assets and unsurprisingly, there has been strong growth in emerging markets. Macroeconomic factors have clearly been an important consideration when researching stocks in this sector as companies are affected by sovereign and regulatory risks and some industries are highly correlated to economic growth,” said S&P Fund Services analyst Simone Gavin.
Ms Gavin added: “Performance bounced back significantly following the financial crisis and over the past year listed infrastructure stocks performed more in line with what is expected on an absolute basis (low double-digit returns). It continues to be a relatively immature market given the long-term nature of investments and we believe investors need to have at least a five-year investment horizon.”
In the sector report, we look at the different benchmarks used; the structure of the investment teams and how the manager splits its coverage; and differences in the universes in which each manager invests, by region and sector. Other themes we explore include how macroeconomic input affects positioning and we provide an update on fund flows to these products and the correlation of listed infrastructure with other asset classes.
The 2011 sector review is S&P’s fourth formal review of listed infrastructure. It covers eight managers and 12 listed-infrastructure capabilities—10 global capabilities, one emerging markets infrastructure product, and one domestic fund.
