Unlisted Infrastructure Funds UK | Russell Investments

What is unlisted infrastructure investing?

Infrastructure is the backbone of our society. It provides the essential services that we rely on every day, such as transportation, connectivity, energy, water, and sanitation. Infrastructure also plays a vital role in economic growth and development.

However, unlisted infrastructure remains underutilised as a diversifier. Traditional asset classes like equities and fixed income play crucial roles but are more susceptible to broader market volatilities and may be supplemented to meet the long-term return objectives of investors.

The global infrastructure landscape is diverse, encompassing transportation, utilities, and social infrastructure. Unlisted infrastructure within the broader infrastructure sector has a valuation surpassing $10 trillion and is expected to experience substantial growth. Key drivers include the need for enhanced energy efficiency, rising data demands, challenges in digital communications from changing work and lifestyle dynamics, and evolving demographics.

Benefits of investing in unlisted infrastructure

Diversification

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.

Income generation

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

Secular growth trends in renewables, digital and social. Business models that are effective at harvesting these long-term trends are difficult to access in the listed market.

Risk management

Managing risk across vintages and profiles

Creating an unlisted infrastructure portfolio requires investors to maintain the designated exposure in capital and strategic allocations. Closed-end funds, commonly used for this purpose, present challenges due to their fixed legal duration. Navigating commitments, predicting capital calls and distributions is complex, especially with unpredictable business scenarios and blind pool commitments. Closed-end funds' continuous asset changes disrupt portfolio diversification metrics, necessitating ongoing oversight. Conversely, an open-end fund structure provides a streamlined and less complex approach, alleviating these challenges.

Why Russell Investments for unlisted infrastructure?

Breadth and depth of access

Our extensive manager research, scale, infrastructure, and industry experience enable Russell Investments to secure favorable capacity terms well in advance for our clients.

Our experience

For 50+ years, Russell Investments has adeptly integrated private markets into institutional portfolios. Our robust governance culture, consulting legacy, and fiduciary mindset ensure that tailored solutions align with client returns, risk preferences, and regulatory obligations

Open architecture

We use thorough research and expertise to build portfolios, seeking distinct sources of return, creating value, and minimizing downside risk. We collaborate with managers specializing in unique, hard-to-replicate strategies.

Types of unlisted infrastructure assets

Our unlisted infrastructure solution

Russell Investments Global Unlisted Infrastructure Fund

The Global Unlisted Infrastructure Fund invests in assets that provide essential services to enable, sustain or enhance economic activity and standards of living, such as Renewables, Digital, Social Utilities, Transportation, and Energy.

Download fund overview (PDF)

Unlisted infrastructure videos

Russell Investments' Chairman and CEO, Zach Buchwald sits down for a conversation with Michael Steingold, CFA, Director of Private Markets, to get his perspective on how we're investing in infrastructure and its impact to our daily lives if we invest now.

Part 1: Infrastructure projects that will help create a more renewable world

Transcript

"the transition that needs the most Capital today is the energy transition as the world moves to a clean energy future we invest across different mainstream Technologies like wind and solar and Beyond the actual generation assets we're also investing in the electric grid improvements that are required to enable Renewables think about how we've developed Battery Technology to store the energy that's produced by Renewables to reduce intermittency this was conceptual only a few years ago and it's now investable the digital sector is another area of growth these are the assets that form the physical backbone of the internet and they also enable so many of the big advancements of the past few years things like AI autonomous vehicles and advanced manufacturing we're investing in data centers fiber networks towers and wireless Spectrum the technology advancements Within These assets are incredible they make the facilities increasingly dense and valuable another emerging area of growth is what we call the Social sector municipal buildings universities schools and hospitals a lot of existing facilities are out of date they need Energy Efficiency and other upgrades and of course growing communities need new facilities as well these institutions sometimes have high debt burdens and that's created an opportunity for private Capital to fund these projects and to get paid an attractive risk-adjusted return for doing that"

Part 2: How investing in infrastructure now, will impact our daily lives in the future

Transcript

"you guys in infrastructure you have to think long term so I want to ask you to look into your crystal ball what are you investing in today that's going to impact our daily lives and you know 20 years from now this is exactly the right question to ask about any infrastructure investment these are such long-term Investments that we need to think about opportunities over spans of decades rather than years the trends we talked about today in renewable energy digital and social are going to be with us for decades just to give you one example think about the impacts that renewable energy will have on electricity pricing in the next decade or two in the next few years electricity pricing will look much like it does today but over time it's going to become progressively cheaper on average and also have more volatility now in 20 years Zach we expect a very different environment with most periods of the day having roughly zero or even negative cost of electricity but big spikes in price around sunrise and sunset this view on future electricity pricing has major implications for the types of assets we acquired today for example we're leaning into energy storage technologies that allow us to store energy produced during the day and be a provider to the market in times of lower Supply and higher price"

Frequently-asked questions

Are unlisted infrastructure investments suitable for individual investors, institutions, or both?

Unlisted Infrastructure investments are suitable for both individual and institutional investors seeking portfolio diversification, income stability, and exposure to long-term assets.

How can unlisted infrastructure investments provide stable and predictable returns?

Unlisted infrastructure investments often involve long-term contracts, concession agreements, or regulatory frameworks that provide a degree of revenue predictability, contributing to stable returns.

How does unlisted infrastructure investing differ from traditional asset classes like stocks and bonds?

Unlisted infrastructure investments often exhibit lower volatility, have longer investment horizons, and generate steady income streams compared to the more fluctuating returns of stocks and bonds.

Is it good to invest in unlisted infrastructure?

Investing in unlisted infrastructure can be beneficial as it offers the potential for stable returns, long-term income streams, and the opportunity to contribute to critical developments that benefit society.

What is unlisted infrastructure investing?

Unlisted infrastructure investing involves allocating capital to projects or assets that support essential services and physical structures such as transportation, utilities, energy, communication, and social infrastructure.

What types of unlisted infrastructure assets are available for investment?

Unlisted infrastructure assets include toll roads, bridges, airports, ports, power plants, water utilities, renewable energy projects, telecommunications networks, and social infrastructure like schools and hospitals.

Why should I consider investing in unlisted infrastructure assets?

Investing in unlisted infrastructure assets can provide a hedge against inflation, low correlation with traditional asset classes, and exposure to essential services that are less sensitive to economic cycles.

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Private markets

Any opinion expressed is that of Russell Investments, is not a statement of fact, is subject to change and does not constitute investment advice.

The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested.

There are no assurances that the investment goals and objectives stated in this material will be met.

Investments in private market securities are generally illiquid as such investments are neither tradable on any exchange or in the secondary market nor would they be transferrable.

Applications for shares in the fund are subject to the terms and conditions set out in the fund’s prospectus, Key Investor Information Document (KIID), memorandum and articles of association. Investors and potential investors are advised to read these documents (and in particular the risk warnings), as well as the further information contained in the annual and half-yearly reports before making an investment.

Unlisted infrastructure