First State launches Global Listed Infrastructure Fund in Europe

First State Investments (UK) Ltd (“First State”) has announced the launch of its Global Listed Infrastructure Fund to European investors.

The First State Global Listed Infrastructure Fund, managed by Peter Meany, Head of Global Infrastructure Securities and Andrew Greenup, Portfolio Manager now has full registration in Austria, France, Germany, Ireland, Sweden and Switzerland and is available to retail and institutional investors in these countries.

Launched to UK investors in October 2007, this fund highlights First State’s ambition to move away from competing within the crowded traditional asset classes and to provide more global and specialist products to European investors. It also further underlines First State’s growing position in both listed and unlisted infrastructure investments.

Infrastructure assets include toll roads, airports, ports, utilities and pipelines. These assets typically operate in less competitive environments and can offer attractive characteristics for investors, including high barriers to entry, pricing power, sustainable growth and predictable cash flows. Pension funds are starting to recognise the value of infrastructure assets in protecting long-dated liabilities from the impact of inflation. Retail investors are attracted by the essential nature of the assets and their predictable income. Global listed infrastructure funds offer a diversified, liquid and transparent exposure to this growing asset class.

Mr Meany said: “Infrastructure securities should deliver good risk-adjusted returns given the quality of the underlying assets, the need for significant new capital expenditure, increasingly supportive regulatory stances and ongoing privatisations. Global listed infrastructure has materially outperformed broader equity and property markets during the current credit crisis, highlighting the attractive opportunity the sector offers to those looking for a defensive asset class with sustainable growth.”

The investment objective of the First State Global Listed Infrastructure Fund is to deliver inflation-protected income and strong capital growth, using the S&P Global Infrastructure Index as a benchmark.

The Fund invests in global listed infrastructure and infrastructure-related stocks including toll roads, airports, ports, utilities, and oil and gas storage and transportation. The Fund diversifies its investments by sector and geography, allocating approximately 40% to transport, 40% to utilities and 20% to energy infrastructure.

There are approximately 900 stocks in the infrastructure-related Global Industry Classification Standard (GICS) sub-sectors. The benchmark contains 75 stocks which represent a market capitalisation of $US1,610 billion1. The Fund also looks to invest in securities outside the benchmark which are consistent with the firm’s investment process.

First State is part of Colonial First State Global Asset Management in Australia, which has a long history of infrastructure investing in both the listed and unlisted markets, and has managed infrastructure portfolios for pension funds since 1994.

Charlie Metcalfe, Chief Executive Officer of First State, said: “We believe our wealth of industry knowledge, experience and resources in the infrastructure arena will enable us to exploit the investment opportunities as the market further develops and matures. It is our intention to continue to develop specialist products to meet investor demand.”