- 94% of financial advisers surveyed fear the threat of a sustained downturn
- 53% cite Brexit uncertainty as key driver to global infrastructure funds to de-risk portfolios
- 80% believe more advisers will recommend global infrastructure to clients against a backdrop of uncertainty
- 66% of advisers expect to see clients’ allocations to global infrastructure rise over next 3 years compared to 32% in 2017
LONDON, 12 June 2019: According to a new study commissioned by Foresight Group LLP (“Foresight”), two-thirds (66%) of advisers expect to see clients’ allocations to global infrastructure increase over the next three years amidst widespread fear of a sustained downturn (94%), Brexit uncertainty (53%) and concern for global equity markets (47%).
Advisers indicated that global equities are causing them the most concern within their portfolios whilst UK equities were also deemed to be a cause for worry1. In recent months there has been a decrease in the use of some traditional alternatives to equities such as bonds, gilts and absolute return funds1. Whilst these asset classes are reportedly being used more infrequently, infrastructure and property are the only non-traditional assets increasingly being used for their defensive qualities; low correlation to equity markets and low volatility.
Infrastructure investment considered an antidote to sustained downturn fears
Against a backdrop of fears over a sustained downturn, Brexit uncertainty and concern over global and UK equities, the majority of advisers (71%) asserted that the most important quality infrastructure assets provide is low correlation to equity markets. Almost three quarters (69%) would consider recommending a diversified infrastructure fund to address concerns about a market correction and equity market volatility.
The survey demonstrated an appetite for infrastructure investment funds on account of their increased availability (80%) whilst comparative results showed that since 2017, advisers predicting an increase in clients’ allocations to global infrastructure has more than doubled when only 32% of advisers predicted it would become popular2.
According to the study, almost two-thirds (64%) of advisers believe that exposure to global infrastructure assets complement UK-focused assets. For example, the opportunity to access assets that are largely unavailable via UK listed companies. A majority (57%) of the respondents claimed to have a positive outlook for listed infrastructure outside the UK.
Foresight launches global infrastructure fund
In response to increasing demand from advisers and investors, Foresight launched a global infrastructure fund at the start of June.
The fund builds on the expertise and success of the existing FP Foresight UK Infrastructure Income Fund, which recently celebrated its first-year anniversary, delivering a full year yield of 5.35% and achieving a number one ranking across total return, max drawdown and standard deviation by CityWire Selector. The new fund invests in global listed renewable energy and infrastructure investment companies.
Nick Scullion, Head of Foresight Capital Management and lead Fund Manager of the new global fund said: “This study shows how infrastructure is continuing to grow in popularity as its role as a low correlated, defensive asset class is now far better understood. There has been significant demand building among advisers for an opportunity to provide their clients with exposure to a global fund to complement our award-winning FP Foresight UK Infrastructure Income Fund. We are delighted to have launched FP Foresight Global Real Infrastructure Fund to meet this demand.”
- Foresight commissioned an infrastructure outlook survey in December 2018 and the results of the newest survey have been compared with this.
- 66% of advisers said that they anticipate an increase in their clients’ allocation to global infrastructure over the next three years.
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Notes for editors
About Foresight Group LLP (“Foresight”):
Foresight is a leading independent infrastructure and private equity investment manager which has been managing investment funds on behalf of institutions and retail clients for more than 35 years.
Foresight has £2.9 billion of Assets Under Management across a number of institutional and UK retail funds.
Foresight is a leading renewables infrastructure investor with over £2 billion of energy infrastructure assets under management. Foresight currently manages more than 140 renewable generation assets globally, with a total generating capacity of 1.6GW.
In Solar, Foresight has invested in over 100 solar plants and has more than 1.1GW of solar generation assets under management around the world.
In Wind, Foresight has more than 165MW of wind generation assets across the UK and Germany.
In Bioenergy, Foresight manages 32 waste projects with 115MW baseload generating capacity, processing over 1.8 million tonnes of waste per annum, having mobilised some £1bn of capital investment. The projects when fully operational will divert some 800,000 tonnes of waste from landfill every year, saving more than c.600,000 tonnes of CO2 emission every year.
In addition, Foresight manages 160MW of Reserve Power assets and two utility scale Battery Storage projects providing 45MW of Enhanced Frequency Response (“EFR”) services to National Grid.
Foresight is headquartered in London with regional offices in Manchester, Nottingham, Milton Keynes, Leicester and Guernsey and international offices in Sydney, Rome, Madrid and Seoul.