Infrastructure powers the world we live in - and when it comes to on-the-ground- research, our team can be found on site.
How we invest in global listed infrastructure
Global trends
At First Sentier Investors our Global Listed Infrastructure team researches the market for what we believe are world-leading companies tackling the major infrastructure challenges the world faces.
That search takes us well beyond Australia's borders. Trent Koch, Portfolio Manager, discusses where we are finding the best opportunities.
The potential of solar
The last decade has seen carbon-free renewables, with the help of low cost natural gas, start to displace coal and oil from the developed world's electricity supply. The International Energy Agency predicts that between 2019 and 2024, the world will add enough renewable generation capacity to power the entire United States.
The continued build-out of renewables, and the need to upgrade and expand energy transmission networks, is expected to underpin stable earnings growth across the utilities sector. Consumers and the environment stand to benefit from increasing supplies of clean, affordable energy. One of the largest positions in our portfolio is a large cap US utility company whose assets include regulated utility businesses and clean energy leader.
Australia has one of the world’s greatest solar opportunities, but are we doing enough?
First Sentier Investors’ Global Listed Infrastructure Portfolio Manager, Rebecca Myatt explores the Australian solar landscape.
Australia is both leading and lagging in the development of solar
While Australia leads the world in rooftop solar, we lag other markets like the US in the development of large scale solar infrastructure, with government policies and incentives less attractive than other markets.
Whether it is solar, wind or water, the opportunity for investors is ever growing. But not all countries are developing at the same pace – making global research and access to global markets vital to investment success.
Australia leads the world in rooftop solar...
… but lags in large scale utility solar
Source: Bloomberg as at 2018.
Source: Australian Photovoltaic Institute, Bloomberg as at 30 November 2019.
Solving urban congestion
On the road from Sydney to Washington
Innovative infrastructure companies are also helping relieve urban congestion around the world. An ASX-listed toll road company operates portfolios of toll roads in Australia and North America, including the 95 Express Lanes in Washington DC. These give commuters a guaranteed speed of at least 90km/h, facilitated by innovative dynamic pricing.
We look at 12-15 toll road businesses globally, and we have found that the management and operations of the toll road company we invest in are world best practice.
Putting driverless cars on the roadmap
The toll road company has transformed from a ‘construction’ company to a company where 40% of employees work in technology. They are preparing for the advent of electric and autonomous vehicles and the changing patterns of road use they will bring. They use military-grade video-capture technology to reduce accidents and congestion on their roads.
An exceptional infrastructure company
With a sustainable yield of almost 5% growing at 5-8% per annum, this infrastructure company offers high quality assets with limited economic sensitivity and pricing linked to inflation – or better.

Peter Meany
Head of Global Listed Infrastructure
The toll road company is one of the largest positions in our portfolio
Source: Toll road company, First Sentier Investors as at 2020. Chart shows earnings before interest, tax, depreciation and amortizaton. The earnings for 2020 and onwards are expected earnings based on First Sentier forecasts. They are predictive in nature and therefore not guaranteed to occur. They may be affected by inaccurate assumptions, known or unknown risks and uncertainties, and may differ materially from the results ultimately achieved.
Every investment decision impacts our world
Infrastructure companies have service obligations and moral accountability to the communities in which they operate
We have formally integrated analysis of environmental, social and governance (ESG) factors into our investment process for over a decade. ESG considerations account for 24% of a company’s score in our quality assessment and ranking model.
Climate change is the most material ESG theme affecting our investment strategy
In the utilities space, attempts to reduce carbon emissions have significant implications for the way in which electricity is generated, transmitted and distributed. Large-scale capital investment in renewables is being led by large cap, publicly-listed electric utilities.
The replacement of older coal-fired power stations with wind and solar power is expected to present substantial capex opportunities for many utilities over coming years. Looking ahead, climate change also has material implications for energy pipelines, which could face stranded asset risk; and freight railways, whose haulage mix may evolve as coal volumes decline further.
We influence companies towards ESG best-practice, engaging on material issues to achieve specific outcomes
Engaging with a pipeline operator
The board
The board of the pipeline operator we invest in initially recommended voting Against providing methane emissions reporting and a 2 degree scenario analysis report. We believe that as shareholders, we have the right to clear disclosure around how the company monitors, manages and minimises climate change and sustainability-related risks.
Our approach
We requested the company to improve their environmental disclosure procedures, particularly relating to Greenhouse Gas emissions. The company is now working on a new framework which will enable them to provide more information on these topics. US$22 million will be spent on improving their data collection, assessment and production systems.
American Listed Infrastructure strategy
American Listed Infrastructure (ALI) is a United States (US) focused liquid real asset strategy that seeks to provide investors with inflation protected income and solid capital growth. It comprises a diversified portfolio of essential service infrastructure companies that own assets in the US.
ALI consists of electric, gas and water utilities, cell towers, freight railways, energy infrastructure (oil and natural gas pipelines & storage), waste management, data centers, toll roads and airports.
Meet the investment team
Peter Meany
Andrew Greenup
Edmund Leung
Rebecca Sherlock
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