Please refer to the glossary for explanations of the investment terms used throughout this website.
Infrastructure broadly refers to assets associated with the provision of essential services for the safe and prosperous functioning of global society. These are physical assets on which we all rely every day – from the utilities that provide our power and water, to the toll roads and railways on which we travel.
These types of businesses typically enjoy the following characteristics:
- Long-life assets governed by long-term contracts
- Inflation-linked revenues
- Stable and growing cashflows
The relatively predictable nature of these cashflows is highly suited to long-term investors who are looking for the potential of a reliable and growing income stream, with their capital value supported by physical assets.
The value of the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested.
What is listed infrastructure?
Investing in infrastructure has traditionally only been possible for institutional investors – such as pension schemes and sovereign wealth funds – by way of large private investments, where capital is locked away for long periods of time.
However, the asset class is increasingly accessible to individual investors, not least through the shares of infrastructure companies listed on the stock market. This is what we mean by listed infrastructure.
Not only can you invest in listed infrastructure with much smaller amounts than that required to invest in private assets, but listed investments typically offer significantly greater liquidity because the shares of larger companies are traded regularly and so can usually be bought or sold quickly and easily. Listed infrastructure can also offer investors a high degree of diversification because each company will typically generate income from a number of different assets.
You can gain access to a broad range of listed infrastructure companies by investing in a fund, which combines holdings in a number of companies into a single investment.
When funds generate income from the companies in which they invest, it can be paid out to investors on a regular basis if they choose to own income shares. Alternatively, income can be reinvested to generate further income and capital growth, if the investments perform well.