Global Listed Infrastructure monthly review and outlook

Global Listed Infrastructure built on strong March quarter performance as investor optimism outweighed an uncertain economic and geopolitical backdrop. The best performing infrastructure sectors included Towers / Data Centers (+10%) and Railroads (+8%). Mobile towers gained on reports that US operator SBA Communications could be the subject of takeover interest from private equity. North American freight railroads increased on healthy March quarter earnings and indications that the long freight recession may be ending.

The worst performing infrastructure sector was Airports (-3%), as an impasse between the main actors in the Middle East conflict weighed on the sector.

The best-performing infrastructure sector was Asia ex-Japan (+9%), owing to strong gains for the region’s utilities and port stocks. The worst-performing infrastructure sector was Japan (-6%), as concerns for rising input costs weighed on the country’s electric and gas utilities.

The Fund returned +1.7% after fees in April¹, -58 basis points behind the FTSE Global Core Infrastructure 50/50 TR Index (SGD).    

The best performing stock in the portfolio was US mobile tower operator SBA Communications (+29%), which owns a portfolio of around 17,000 towers in the US, along with operations in faster-growing Latin American and African markets. The company collects rent from mobile phone companies that install their network equipment onto SBA’s towers, with rental growth typically driven by annual escalators. Its share price surged higher in early April following reports that it had received preliminary takeover ‌interest from private equity. US data center operator Equinix (+10%) performed strongly against a backdrop of robust customer demand for Artificial Intelligence (AI), cloud computing and networking services. At its March quarter earnings release, the company noted that AI model providers and cloud companies were expanding their use of its facilities.

A holding in Australian-listed toll road owner, operator, and ⁠developer Atlas Arteria (+12%), whose assets include a stake in the APRR motorway network in France and the Chicago Skyway in the US, rallied after receiving a takeover bid from unlisted infrastructure manager IFM Global Infrastructure Fund. IFM already owns more than a third of Atlas’ shares, making it difficult for it to acquire more without launching a full takeover offer. In early May, Atlas advised shareholders to reject the offer – a two-tiered bid representing either a 10% or an 18% premium to the company’s previous market close – on the grounds that it materially undervalued the company.

UK water utility United Utilities (+11%) gained following an equity raise that will enable it to spend an extra £2.5 billion on its capital expenditure (capex) program by 2030. The funds will be spent on expanding the company’s water and wastewater networks to support new data centers and housing, and on maintaining and upgrading existing pipelines. The additional capex will drive a faster expansion of the company’s Regulated Asset Base (RAB) than previously expected, leading in turn to a higher earnings growth rate. Sentiment towards National Grid (+3%), whose assets include UK electricity transmission and distribution networks, and which is also carrying out a substantial multi-year capex program, was similarly buoyed by these developments.

North American freight rail represented another area of strength within the portfolio. US operators Union Pacific (+11%) and CSX Corp (+11%), along with Canadian peer Canadian National Railway (+7%), announced healthy March quarter earnings characterised by disciplined cost management. Recent increases in pricing for the US trucking sector – railroads’ primary competition – fuelled optimism that rail pricing has further scope to rise. Further, a fourth consecutive month of expansion for the US ISM Manufacturing PMI index, following a long period of contraction, suggested that freight haulage volumes may begin to face upward pressure.

The worst performing stock in the portfolio was Japanese passenger rail company West Japan Railway (-9%), whose rail network covers Japan’s Kansai region including the major cities of Osaka and Kyoto. The stock lagged on concerns that its infrastructure characteristics could be diluted, following news that the company was considering a capital and business alliance with Japanese financial services group Resona Holdings (+13%, not in our Focus List).

Regulated California utility PG&E (-5%) underperformed owing to concerns about political risk. During the month, Eric Swalwell, previously a leading Democratic candidate for the Californian gubernatorial election, announced he had withdrawn from the contest. The move raised concerns that alternative candidates with more interventionist policy proposals for the state’s regulated utilities may now have an increased likelihood of winning the election, due to be held in November. Investor sentiment towards Sempra (-2%), whose underlying businesses include California utilities San Diego Gas & Electric and the Southern California Gas Company – as well as the fast-growing Texas electric transmission and distribution utility Oncor – was also affected by these developments.

Swiss-listed Flughafen Zürich (-7%) and Spanish peer AENA (-5%) lagged as the ongoing Middle East conflict and associated uncertainty around flight schedules, fuel costs and airspace access continued to overshadow European airport operators. French operator Groupe ADP (-2%) held up better despite softer passenger spend rates at its airports, as its unexpected sale of a 7.3% stake in India’s GMR Airports for €924 million proved supportive.

¹ Fund performance is based on the Singapore unit trust, net of fees, expressed in SGD terms.
All stock and sector performance data expressed in local currency terms. Source: Bloomberg.

Crown Castle, which owns and operates a portfolio of approximately 40,000 mobile towers located entirely in the US, was added to the portfolio. A series of strategic missteps in recent years – including the build-out of an underperforming fiber business unit – has led the company to trade at a material discount relative to peers. In 2025, the company agreed to sell its fiber business and appointed a new leadership team tasked with focusing exclusively on its macro tower assets. We believe this approach will enable Crown to improve its earnings growth rate and close the valuation gap that currently exists between it and peers. There is also scope for the recent SBA takeover announcement to support valuation multiples across the tower sector more broadly.

A position was also initiated in GFL Environmental, the fourth-largest North American waste management company with operations in every province in Canada and 18 US states. The company is led by an effective management team with a strong entrepreneurial culture. Stringent landfill site regulations give the company high barriers to entry and strong pricing power. The company is trading at a material discount to peers, with scope to close this gap as it strengthens its balance sheet and grows free cash flow by raising prices and reducing costs. A sceptical market reaction to the news that GFL was seeking to acquire smaller western Canadian peer Secure Waste Infrastructure provided an attractive entry point to the stock.

A holding in mobile tower operator American Tower was sold during the month after an extended period of strong performance relative to peers reduced mispricing and moved the stock to a lower ranking within our investment process.  

The strategy invests in a range of listed infrastructure assets including toll roads, airports, railroads, utilities and renewables, energy midstream, wireless towers and data centers. These sectors share common characteristics, like barriers to entry and pricing power, which can provide investors with inflation-protected income and strong capital growth over the medium term.

The portfolio is overweight railroads, via holdings in US freight rail operators and European and Japanese passenger rail stocks. North American freight rail companies represent a key component of the continent’s transportation system and are a core part of the global listed infrastructure opportunity set. Proposed M&A activity within this space is expected to support earnings growth by providing scope for reliability improvements, faster transit times and cost efficiencies.

The portfolio also has overweight exposure to airports. The sector is well-positioned to benefit from the ongoing drivers behind global travel demand growth; wealthy baby boomers with money to spend on travel during their retirement, Gen Z prioritising experiences over possessions, and growing middle classes in Asia and Latin America. While airports have lagged since the outbreak of hostilities between the US and Iran, we believe the magnitude of the earnings impact is likely to be less than market pricing currently reflects.

Utilities / renewables make up a substantial part of the portfolio. These stocks are benefiting from unprecedented growth in demand for electricity, driven by the needs of AI and data centers, as well as industrial onshoring and a broad-based move towards electrification. Earnings growth rates for US utilities have already begun to accelerate due to the required investment to support greater demand for power. In the event of an economic downturn, utility earnings are likely to prove relatively resilient, owing to their regulated earnings frameworks and essential service nature.

The portfolio is underweight energy midstream. Within this space, the portfolio has overweight exposure to faster-growing US energy midstream stocks but is substantially underweight Canadian companies, which tend to have higher leverage and slower growth. Rising demand for electricity in the US, as well as being positive for utilities, is supporting demand for natural gas as a feedstock for gas-fired power plants, with scope to create additional growth opportunities for US-based energy midstream companies.  The Ukraine and Iran conflicts also provide opportunities for North American energy midstream companies to serve export markets by providing a relatively cheap and reliable source of LNG and Natural Gas Liquids. 

Source: Bloomberg and First Sentier Investors as at 30 April 2026.