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

  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.
8 June 2021

Ingrid Edmund

Senior Portfolio Manager

Ben Kelly

Senior Thematic Analyst

Funding Europe’s green infrastructure finance gap

Environmental, social and governance investing has received huge policy support, particularly in Europe where the build out of green infrastructure has been impressive. We look at four major investment themes this presents.
Read time - 7 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
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
20 September 2020

Sharon Vieten

Investment Grade credit analyst, Fixed Income

Euro pipeline proposal brings hydrogen to the demand side

A new report showing how existing European gas infrastructure can be modified to transport hydrogen at an affordable cost is an interesting prospect for would-be investors
Read time - 5 min
28 August 2020

Fixed Income Desk

In Credit - Weekly Snapshot

Summer slumber soothes markets

Our fixed income team provide their weekly snapshot of market events.
Read time - 3 min
20 August 2020

Kirk Moore

Global Head of Research

Discovering which business models will prosper after the pandemic

Negative, unchanged and positive impacts
Read time - 7 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

Webinar

During this year’s IPE Summer Congress, held on 23-24 June, Ingrid Edmund, Senior Portfolio Manager in our infrastructure team presented, ‘Managing Volatility in an Infrastructure Portfolio’.

Insights

8 June 2021

Ingrid Edmund

Senior Portfolio Manager

Ben Kelly

Senior Thematic Analyst

Funding Europe’s green infrastructure finance gap

Environmental, social and governance investing has received huge policy support, particularly in Europe where the build out of green infrastructure has been impressive. We look at four major investment themes this presents.
Read time - 7 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
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

Infrastructure Investments Team

Ben Kelly
Senior Thematic Analyst
Heiko Schupp
Global Head Of Infrastructure Investments
Antonio Botija
Head Of Origination & Investments
Ash Kelso
Head Of Asset Management
Ingrid Edmund
Senior Portfolio Manager
Iain Richards
Head Of Responsible Investment

Important Information​

For use by institutional clients and consultants only (not to be passed on to any third party). Please note that this document relates to a strategy which is still in development and is subject to change at any time. Past performance is not a guide to future performance. The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. Your capital is at risk. This means that an investor may not get back the amount invested. Where references are made to portfolio guidelines and features, these are at the discretion of the portfolio manager and may be subject to change over time and prevailing market conditions. Actual investment parameters will be agreed and set out in the prospectus or formal investment management agreement. Please note that the performance targets may not be attained. The analysis included in this document has been produced by Columbia Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained from external sources is believed to be reliable but its accuracy or completeness cannot be guaranteed. Issued by Threadneedle Asset Management Limited. Registered in England and Wales, Registered No. 573204, Cannon Place, 78 Cannon Street, London EC4N 6AG, United Kingdom. Authorised and regulated in the UK by the Financial Conduct Authority. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. columbiathreadneedle.com

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