Investing in infrastructure
The long-lived, semi-monopolistic position of infrastructure assets supports a steady cash flow profile and, accordingly, historical low volatility as compared to broad market equities.
Why choose Russell Investments for infrastructure investing?
Russell manages over C$3.4 billion in global listed infrastructure for clients around the world¹. We have considerable experience researching and investing across the real assets spectrum. We offer:
- Capital markets expertise,
- Rigorous due diligence of the global manager universe,
- Multi-manager portfolio construction, incorporating risk management and diversification for investors, and
- Efficient implementation of investment strategy.
Why invest in infrastructure?
As a real asset category, infrastructure offers a distinct risk, return and diversification profile relative to other asset classes, and thus merits consideration for a discrete allocation in a diversified portfolio.
Infrastructure investments typically feature steady cash flows derived from tangible, long-life assets with monopoly-like pricing power; many are regulated and may feature income linked directly to inflation.
Long-term return potential
"Pure play" infrastructure assets—which include toll roads, regulated utilities, airports, seaports and cell towers—are essential to the fluid, effective functioning of societies, and accordingly they have highly inelastic demand patterns.
1As of December 31, 2015
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
Diversification and multi-asset solutions do not assure a profit and do not protect against loss in declining markets.
Investments in infrastructure-related companies have greater exposure to the potential adverse economic, regulatory, political and other changes affecting such entities. Investment in infrastructure-related companies are subject to various risks including governmental regulations, high interest costs associated with capital construction programs, costs associated with compliance and changes in environmental regulation, economic slowdown and surplus capacity, competition from other providers of services and other factors. Investment in non-U.S. and emerging market securities is subject to the risk of currency fluctuations and to economic and political risks associated with such foreign countries.