Toll roads and telco towers most attractive in listed infrastructure

Oksana Patron

16 December 2022

Toll roads and telecommunication tower companies are currently the most attractive assets globally in terms of listed infrastructure.

According to Andrew Maple- Brown, co-founder and managing director of Maple-Brown Abbott Global Listed Infrastructure, these two sectors offered the highest quality infrastructure assets but for different reasons, these assets were still trading at significant discounts to Maple-Brown’s valuations.

“Interestingly, we have not seen a corresponding softening of values for these assets in the direct infrastructure market, reflecting a divergence between the markets,” he said.

With funds under management for the global listed infrastructure expected to continue its upward trajectory to US$350 billion in 2030, from US$145 billion in 2021, the manger said that central to all the themes supporting the sector’s growth would be the integration of environmental, social, governance (ESG) research and the ability of different companies to manage those risks.

Apart from a well-known role that infrastructure assets can play in portfolios, going forward the central themes underpinning its growth and the further need for infrastructure globally would be its role in supporting the energy transition, the electrification of society as well as digitalisation and the general shortage of infrastructure globally.

“This is a dramatic increase and attests to the growing recognition by investors of the role that infrastructure can play in a portfolio, including through its inflation protection, income yield and reduced volatility characteristics when compared to global equities, and the diversification benefits that it can provide a portfolio,” Maple-Brown commented.

“We believe this growth will continue and that global listed infrastructure will become a growing allocation within investment portfolios. The Global Listed Infrastructure Organisation (GLIO) projections suggest we could see funds under management in the sector grow to around US$350 billion in 2030.”

At the same time, ClearBridge Investments has warned that while valuations of underlying infrastructure assets remaining relatively unaffected by the looming recessions in the US, Europe and the UK next year, the impact of equity market volatility on the prices of listed infrastructure securities was expected to be of more significance.