Infrastructure

Infrastructure approach
Infrastructure insights

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

  1. 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.
  2. 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.
  3. 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.
22 January 2021

Investment team updates - Bullet points 22 January

Our investment team provide their weekly snapshot of market events.
Read time - 3 min
14 January 2021

Ingrid Edmund

Senior Portfolio Manager

European sustainable infrastructure - in a sweet spot

There are four issues that affected infrastructure in 2020, and they reaffirm our confidence in the team’s long-term investment thesis and strategy.
Read time - 6 min
17 December 2020

Video: 2021 investment outlook

Mark King, Head of Content for EMEA, is joined by a panel of our leading investors to talk about the outlook for economies and markets, as well as the themes, trends and events they expect to see in 2021. Featuring: William Davies, Chief Investment Officer EMEA and Global Head of Equities; Neil Robson, Head of Global Equities; Maya Bhandari, Multi-Asset Portfolio Manager; and Alasdair Ross, Head of Investment Grade credit.
Read time - 3 min
22 November 2020

Investment team updates - bullet points 20 November

Our investment team provide their weekly snapshot of market events.
Read time - 3 min
30 October 2020

Investment team updates - bullet points 30 October

Our investment team provide their weekly snapshot of market events.
Read time - 3 min
20 October 2020

Sustainable Infrastructure - A sustainable perspective on digital infrastructure

Infrastructure investors have a long track record as owners of telecommunications assets. However, 2020 is the year in which digital infrastructure has clearly established its place as a core infrastructure sector, which also provides a huge opportunity for investment in sustainability
Read time - 15 min

The ‘OMS’ investment and portfolio construction framework

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

PDF

Strategy Profile

Events

Past speaking engagements:

Address

INFRASTRUCTURE INVESTOR 2019 GLOBAL SUMMIT

Date: 19-20 March 2019
Location: Berlin, Germany
Organiser: Infrastructure Investor

Insights

5 May 2021

Paul Smillie

Senior Credit Analyst

Dori Aleksandrowicz

Senior Credit Analyst

Banks go from pariah to protected species

The unprecedented fiscal response to the Covid-19 pandemic, combined with concerted action by global central banks, ensured the banking sector kept vital credit flowing to the wider economy. Now, while the cost of risk is falling, the outlook for banks globally is mixed