The infrastructure sector arouses high interest for investors, mainly because the needs for funds are enormous both for the renewal and maintenance of traditional equipment, as well as to face other essential equipment in the face of the challenges of our society: decarbonization and sustainability, digitalization, etc. “Debt-to-GDP ratios in the developed world leave little room for governments to meet a significant portion of these needs, creating a huge opportunity for private capital to deliver these much-needed projects,” highlights Anish Majmudar, Head of Real Assets at M&G Investments. Furthermore, points out Marta Vila, product specialist at Bestinver, “in the current context there is an imbalance between supply and demand, which drives the value of these assets, as demonstrated by the recent consolidation of large players and the activity of mergers and acquisitions.”
Strategy on the rise
Many of the large international managers have investment funds with that focus. This is the case of the giant Blackrock, which in addition to the BGF Sustainable Global Infrastructure Fund – which has advanced 14.25% since its launch in 2021 – offers a listed fund, iShares Global Infrastructure UCITS ETF, which replicates an index made up of companies from emerging and developed countries. The strategy has advanced 43% in the last five years. More informationAs for Morgan Stanley’s QuantActive Global Infrastructure Fund, it has gained 45% in the last five years, with oil and gas storage and transportation, electricity transmission and distribution, and communications as the main sectors. The same profitability is achieved by First Sentier Global Listed Infrastructure Fund thanks to its bets on the electricity sector, public services and roads and railways. In the case of DWS Invest Global Infrastructure, whose return reached 36.4% in the period, the bulk of its portfolio is invested in shares of transportation and storage companies, various public services and electric public services. Among the Spanish, Ibercaja Infraestructuras, with a focus on assets that follow major current trends linked to infrastructure, construction and engineering, real estate development and transportation. It has rented 35% in the last five years, and maintains 3.5% of its portfolio in Spanish companies. O CBNK Selección Infraestructuras, focused on engineering and infrastructure, positioning itself in both variable income and public and private fixed income. Up 24%. Already in venture capital funds, we have Bestinver Infra, with an initial contribution of 100,000 euros and whose maturity period is eight years. Or Trea Infraestructuras, in which case it composes its portfolio with other funds in that sector and has an expected annualized return between 7% and 10%. More informationThe vast majority of large infrastructure funds are designed for institutional investors or large net worth investors, capable of assuming very high minimum investment amounts and the risk of illiquidity that the minimum investment terms entail being between 6 and 8 years. In exchange, target returns of between 6 and 10%, depending on the risk profile of the investments.
Sectors of opportunity
«The sectors that we see as most attractive are those linked to clean energy, digitalization, technology and sustainable mobility. These areas combine high potential for structural growth with a growing global demand for technological and energy modernization,» says Tania Salvat, head of the institutional business for Iberia at Blackrock, a manager that last year completed the acquisition of the largest infrastructure platform in the world, Global Infrastructure. Partners (GIP), one of the reference shareholders of, for example, Naturgy. The sector that most attracts the experts consulted is digital infrastructure and telecommunications in its multiple variants: «years ago the investment in telephone towers, later fiber optic networks and currently data centers. It is without a doubt the largest sector by value of operations,» summarizes David Velázquez Gómez, partner of Buenavista Infrastructure, «without forgetting renewable energies, which have represented one of the main investments in previous years although they have begun to lose relevance.» Richard Marshall, Director of Infrastructure Research at DWS, highlights that “all benchmark indices are recording positive total returns over the short, medium and long-term horizons, even in challenging contexts such as the Covid-19 pandemic and associated recession, the 2022 energy crisis and subsequent inflationary period, as well as the higher interest rate environment that followed. continued.”
Spain, magnet for capital
“Spain is a key market for international funds that seek stable assets with predictable regulatory frameworks,” says Guillermo Uriol, head of Investment Grade at Ibercaja Gestión, and recalls that it is estimated that the country needs to “mobilize between 150,000 and 200,000 million euros until 2030 in infrastructure related to the energy transition”, and that sectors such as railways, energy storage and distribution networks are in expansion. In fact, confirms Antonio Sánchez Covisa, partner responsible for Engineering and Construction at Deloitte, the funds have intensified their presence in Spain in recent years «adopting more complex strategies, positioning themselves in sectors such as telecommunications, renewable energy and digitalization. They have gone from investing in individual assets to financing complete portfolios or platforms, seeking efficiency and scalability. In addition, there is a growing interest in segments with greater risk-return,” he adds. As interesting projects, Laura Cózar, partner of the consulting firm Accuracy, mentions that Exolum will invest more than 100 million in building a terminal in A Coruña to store and distribute sustainable fuels. Or that Amazon, Microsoft and Google are developing data centers in Spain that are estimated to generate an economic impact of tens of billions by 2030.