It is estimated that as the world will be approaching the 10 billion population mark in 30 years’ time, there will be over USD50 trillion worth of new infrastructure assets globally in the next decade, with a significant portion of such assets being driven by private investments.
This information was delivered during a well-attended MeDirect webinar, held recently together with leading global fund house Franklin Templeton Investments, on the topic of investing in a portfolio of infrastructure companies, as a means to provide sustainable income and drive global sustainable growth.
This was the second medirectalk of its kind to be held online, given the current situation and the necessary social distancing requirements. medirectalk is a series of seminars organised by MeDirect Bank, featuring several financial experts and asset managers sharing their views on market and investment opportunities.
The webinar started with an overview by David Chambers, Business Development Director of Franklin Templeton Investments, followed by Ajay Dayal, who delivered a keynote speech on the topic of infrastructure as a means of investment.
Dayal is the Managing Director and Head of International Equity, Product Specialist Group, Legg Mason – a division of Franklin Templeton.
He said infrastructure is deemed to be the critical life blood of the world and is a mega-trend that will shape our children’s lives over decades. More infrastructure spending is being committed to by the big nations, as they continue to develop. Clearly, such infrastructure projects require funding, he said.
“From the moment we wake up, to taking a shower, to having breakfast, to traveling to work, to sending your kids on the school bus or train, to working in the office or factory, and to the time we come home and eat dinner with our family or loved ones, we are using infrastructure facilities. Water, electricity, gas, roads, railroads, communications, are all used by many of us every single day. We rely on infrastructure,” Dayal said.
It is estimated that USD20 trillion will be spent in the investment of electricity supply, as well as another USD8.4 trillion in regulated and contracted generation from gas, solar and wind sources – between the period 2018 and 2040. In addition, USD8.6 trillion are expected to be spent on networks and energy storage.
Dayal added that as the world gets richer and people get wealthier, they want to have better quality infrastructure. All countries want better, faster and cleaner railways to transport people, or offer more toll roads to provide drivers better choices in congested cities, as well as more or better airports to facilitate business and leisure travel demands. Countries are also demanding cleaner forms of energy as they become more aware of the climate impact of fossil fuels, he said.
“This infrastructure not only makes people’s lives better, but it also means that economies that have better transport infrastructure and utilities often have better, stronger and faster growing economies. Simply put, good and better infrastructure is the foundation of any growing economy,” Dayal said.
He covered the benefits of infrastructure and how investors can access infrastructure assets. Dayal explained why a smart portfolio of infrastructure stocks can provide an investor with a stable, sustainable and attractive income, as well as capital growth.
Dayal delved also into Environment, Social and Governance (ESG) aspects to investing, stating that the stakeholders need to understand how government policy makers and investors think in terms of making future investments.
At the end of the webinar, an overview of the Legg Mason ClearBridge Infrastructure Value Fund was given. The Legg Mason ClearBridge Infrastructure Value Fund gives investors an attractive balance of capital growth and good income over a long period of time, with the ability to buy and sell into the Fund easily on a daily basis as per the regulations. Today the fund is close to USD800 million of client money from all over the world.
The ClearBridge Infrastructure investment team, one of the largest in the world, consists of 13 dedicated infrastructure specialists, with complementary skill sets and significant experience in this particular asset class.
This content was supplied by MeDirect