Foresight Group has launched a new infrastructure fund to invest directly into publicly listed companies that own and operate real infrastructure or renewable energy assets globally, which is also know as ethical investing. As the company recently mentioned in a press release, the FP Foresight Global Real Infrastructure Fund (GRIF) has received FCA regulatory approval and will be actively managed. Among other goals, the group is targeting a total return of more than 3% per annum above the rate of UK inflation (measured by UK CPI).
As mentioned by the company, the GRIF’s model portfolio has consistently outperformed both UK and global equity markets over the last five years, delivering higher returns, paired with lower volatility than the FTSE All Share Index and the FTSE All World Index. Foresight attributes the outperformance to the focus on real infrastructure, which is defined as companies that own and operate real assets with long-term, inflation-linked contracts attached, rather than cyclical equity infrastructure companies that are active in the broader infrastructure environment without true infrastructure characteristics.
Sustainability is a key consideration in the investment team’s stock selection process. The fund will invest only in the shares of companies that the team assesses deliver a net social or environmental benefit and comply with the ten principles of the United Nations Global Compact for business.
As traditional sources of income face structural issues, renewable energy and infrastructure become increasingly attractive asset classes and a mainstay of investing for diversification. These assets are often characterised by stable, project-level cashflows and deliver predictable income with lower volatility, low correlated to traditional asset classes.
Nick Scullion, Head of Foresight Capital Management and lead Fund Manager of the new global fund said: “The launch of the new FP Foresight Global Real Infrastructure Fund marks an exciting evolution in the way that investors can access the infrastructure asset class. The Fund invests exclusively in the shares of companies that own and operate physical infrastructure assets and contracts that typically benefit from long-dated, index-linked, government backed cash flows that have historically shown low volatility and low correlation to equity markets.”
Ahead of the Fund’s launch, Foresight conducted research with 144 advisers that revealed a strong appetite for global infrastructure amidst fears of a sustained downturn, Brexit uncertainty and market instability. An overwhelming majority (80%) of advisers now expects to see more global infrastructure funds recommended to clients as the asset class continues to become more mainstream. 66% of advisers expect to see clients’ allocations to global infrastructure increase over the next three years – more than double the number since 2017 when just 32% of advisers predicted it would become more popular.
GRIF will draw from an investible universe of 91 listed renewable and infrastructure investment companies from a global pool of 5,700 companies. The Fund will invest in a diverse portfolio of companies that own and operate assets ranging from solar power and geothermal generation plants to medical office buildings and storage facilities that have strong public sector counterparties and stable, predictable demand.nThese listed companies have a combined market capitalisation of £180bn and have grown in number by 259% since 2010.
The Fund will build on the success of the FP Foresight UK Infrastructure Income Fund (FIIF), which celebrated its first anniversary in December 2018 and delivered a full year yield of 5.35%. More recently, the Fund was ranked number one across total return, maximum drawdown and standard deviation by CityWire Selector on a one-year basis for two consecutive months.
“The global approach provides access to assets in geographies that benefit from these attractive characteristics while providing diversification across asset type, regulation and sovereign risk, and currencies from multiple developed markets. The Fund is designed to act as a shock absorber to bring stability to portfolios during a period of anticipated volatility,” concluded Nick Scullion.
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.