Our approach

We target long-term, consistent performance, aiming to generate secure income from tenants with high credit quality.

By concentrating on high-quality real estate with long leases, and structuring investments so that a high proportion of the property’s value is derived from the bond-like contracted income stream, and less from the reversion of the lease upon expiry, market risk can be reduced. Meanwhile, investors can also benefit from a closer match to their liability and duration needs. Rents can be linked to the Retail Price Index or Consumer Price Index, or subject to fixed uplifts, offering an inflation hedge.

Benefits

Bringing more clarity for investors seeking long-dated cash flows.

Illiquidity premia

Attractive yields relative to comparable listed credit – although real estate assets are significantly less liquid than bonds.

Predictable cash flow

Quality tenants on long leases can deliver solid, long-term cash flows.

Diversification

The risk profile of private infrastructure debt is different to listed corporate bonds, allowing investors to access different sectors and types of revenue.

Lower risk

Investors are secured creditors. Deriving the majority of value from underlying leases means less exposure to changing capital values.

Key risks

Investment risk

The value of an investment and any income from it can go down as well as up and can fluctuate in response to changes in currency exchange rates. Investors may not get back the original amount invested.

Return profile

Long-lease assets are expected to be comparatively resilient at stress points, but may lag when traditional real estate markets are booming.

Real estate risk

Where funds are invested in real estate, investors may not be able to redeem any units in the fund when they want because real estate assets may not always be readily saleable. If this is the case, we may defer a request to switch or cash in shares or units.

Valuation risk

Certain assets held in the fund could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.

Real estate allows us to generate long-term, inflation-linked income streams, which can play a valuable role in helping investors meet their long-term liabilities.
Renos Booth, Head of Real Estate Long Income

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