In this webinar, Sam Murphy, Tod Davis and Colette Ord from Deutsche Numis’ investment companies team gave an update on the listed infrastructure sector, explaining why they are feeling optimistic on its outlook.
They began by looking at share price total returns year-to-date, which have somewhat underperformed and, in the team’s view, do not reflect some improvements in the macro situation, company fundamentals, nor the action that both management and boards have been taking. Discounts remain wide and have widened marginally over the past few months.
However, recent rate cuts have started to be reflected in share prices and, over the past three months, the sector has risen by 5.2% (on a total return basis). This reinforces the investment companies team’s view that, if there are further rate cuts as expected, there is potential to see some outsized returns going forwards. As capital moves back into the sector, it seems that investors could favour the more liquid vehicles.
The current average sector discount is 18% (market cap weighted), which compares to a long-term average premium of 4% since the inception of the sector. This means that, if we get anywhere close to this long-term average, there is potential to see strong share price returns.
The team then took a deeper dive into the sub-sectors, including core, renewable generation and transition, as well as looking at mid-market/core plus strategies. They highlighted notable price moves and shared their fund recommendations, before concluding with a lively Q&A.
To find out more about our investment companies offering, visit funds.numis.com.
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In this webinar, Sam Murphy, Tod Davis and Colette Ord from Deutsche Numis’ investment companies team gave an update on the listed infrastructure sector, explaining why they are feeling optimistic on its outlook.
They began by looking at share price total returns year-to-date, which have somewhat underperformed and, in the team’s view, do not reflect some improvements in the macro situation, company fundamentals, nor the action that both management and boards have been taking. Discounts remain wide and have widened marginally over the past few months.
However, recent rate cuts have started to be reflected in share prices and, over the past three months, the sector has risen by 5.2% (on a total return basis). This reinforces the investment companies team’s view that, if there are further rate cuts as expected, there is potential to see some outsized returns going forwards. As capital moves back into the sector, it seems that investors could favour the more liquid vehicles.
The current average sector discount is 18% (market cap weighted), which compares to a long-term average premium of 4% since the inception of the sector. This means that, if we get anywhere close to this long-term average, there is potential to see strong share price returns.
The team then took a deeper dive into the sub-sectors, including core, renewable generation and transition, as well as looking at mid-market/core plus strategies. They highlighted notable price moves and shared their fund recommendations, before concluding with a lively Q&A.
To find out more about our investment companies offering, visit funds.numis.com.