07/18/2013 | By Carisa Chappell
A growing interest in investing in infrastructure has prompted CBRE Clarion Securities LLC to launch the Global Infrastructure Value Fund. The fund, which invests in listed infrastructure companies, will be managed by T. Riston Ferguson, CEO and co-chief investment officer, and Jeremy Anagnos, senior global portfolio manager. Ferguson says the new fund will allow investors to access an asset class that he anticipates will grow from the increasing need for countries to expand, develop and improve their domestic infrastructure assets.
Ferguson spoke to REIT.com about establishing the new fund, its goals and his outlook for the infrastructure sector.
REIT.com: What spurred the creation of the Global Infrastructure Value Fund?
T. Ritson Ferguson: Infrastructure is something that we’ve been studying for many years now. We actually started building a team and went live with the capability about two to three years ago. We just felt now was the time to continue the evolution of that part of our business by forming a mutual fund and putting it out there.
Infrastructure is a big and growing asset class. It has many characteristics investors in listed real estate like, including long-term growth, good returns, diversification benefits versus other equities and certainly bonds. We see the future of infrastructure as an asset class as being quite robust looking out over the next two to three decades.
REIT.com: Why was now a good time to launch the fund?
Ferguson: We have been managing a portfolio of infrastructure real estate for a couple of years now, so it felt appropriate, given the evolution of our team and track record, that now would be a good time to get the mutual fund out there. But also we’ve noticed a pick-up in (capital) flows to listed infrastructure and its components when you kind of study mutual fund flows and things like that. Also, just the interest from our clients that having a collective vehicle like this fund was timely.
REIT.com: Do you anticipate a growing interest in this asset class? If so, why?
Ferguson: Yes. Infrastructure is something that institutional investors have been looking at as part of their alternatives—or, really, more part of their real assets investment.
There’s been a lot of money raised for private funds investing in infrastructure, and there’s actually been a growth in mutual funds and others offering sort of an exposure to the listed infrastructure asset class. We’ve certainly detected that from our investors, both institutional and our fund investors.
REIT.com: What makes this asset class unique and attractive?
Ferguson: Listed infrastructure has a history of good total returns. Looking back, it has had double-digit per annum returns looking over the last 10 years.
I think—relevant in today’s market—a good bit of that return is in the form of dividend income. The underlying assets that sort of generate that have a significant amount of duration
Then, when you add to that the fact that there’s a lot of money being invested in and needed to be invested in infrastructure around the globe, and it’s frankly more than what traditional government public sources of financing for infrastructure can do, we see the listed sector being a significant participant in those infrastructure capital investments.