Infrastructure
Columbia Threadneedle European Sustainable Infrastructure Strategy
Europe offers a compelling infrastructure investment landscape with a diverse, well established and supportive legislative environment for private investment. Yet investment needs far outweigh private capital flows. This presents an attractive opportunity for investors to generate stable, inflation-protected yields from high-quality ‘best-of-class’ infrastructure assets.
At Columbia Threadneedle, we have substantial experience in managing real assets via our UK and US real estate businesses. Our infrastructure strategy complements our offering and leverages our collaborative approach across our global investment research.
When investing in infrastructure, we believe it is important to take a long-term view, to build projects that are sustainable and ecologically responsible, and to be prepared to continually make improvements. An open-ended/evergreen structure that allows for dynamic portfolio construction and the flexible deployment of capital is therefore key.
Sustainability is particularly close to our hearts. By investing in well-governed companies that are better positioned to manage the financial and non-financial risks and challenges inherent in business, we can capture opportunities that deliver measurable positive outcomes and better financial performance.
Objective
The strategy aims to deliver consistent total returns comprising recurrent inflation-linked yield and medium to long-term capital growth, across economic cycles, by constructing a diversified portfolio of European, unlisted infrastructure equity investments.
Sources of added value
- An open-ended/evergreen strategy dedicated to investing in European, core mid-market infrastructure equitiesThe perpetual investment period enables us to acquire and actively manage infrastructure assets over the long term, driving value and unlocking growth potential by investing and adapting in a changing environment. We see significant opportunity in the European mid-market space (under €300million), with a diversified deal flow resulting in less competitive pressures for assets across all infrastructure sectors.
- Proprietary investment and dynamic portfolio construction approach We have developed a framework (the ‘OMS’) which integrates Columbia Threadneedle’s infrastructure expertise with its global research and specialist Responsible Investment capabilities. Our origination strategy is based on the principle that each investment needs to be additive to the portfolio from a risk and return, as well as from a sustainability perspective. This allows us to build a balanced, robust portfolio with controlled volatility through economic cycles and a critical focus on long-term growth.
- Sustainability It is integrated at all stages of the investment process. We analyse a prospective asset’s compatibility with the strategy’s objectives and values and create an outcome-focused sustainability plan, which is integrated in the long-term business plan and reflected in the acquisition price. Post-acquisition, we engage actively with all stakeholders to ensure alignment and delivery of sustainable outcomes.
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The ‘OMS’ investment and portfolio construction framework
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Capabilities
Media type
Themes
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Key Facts
Processing acitivity | Legal basis for Processing |
|---|---|
Strategy structure | Open-ended* |
Performance target¹ | Net IRR of 8-10% p.a. Net yield of 5-6% p.a. |
Strategy structure | High-quality and sustainable infrastructure assets in Europe (primarily in European OECD countries) with a focus on utilities, transportation, social infrastructure, renewable energy and telecommunications. |
Literature
Events
Past speaking engagements:
INFRASTRUCTURE INVESTOR 2019 GLOBAL SUMMIT
Date: 19-20 March 2019
Location: Berlin, Germany
Organiser: Infrastructure Investor