Challenging the benefits of infrastructure
Infrastructure has emerged as a new asset class that can offer many benefits from a portfolio construction perspective, according to Challenger.
Matt Gaden, head of institutional business at Challenger Financial Services Group, spoke on the topic last week in Sydney at the Innovative Investment Forum 2006.
Infrastructure at Challenger sits within their asset management business. According to Gaden, the unlisted Challenger Global Infrastructure fund has been designed to make it easier for investors to gain exposure to the infrastructure sector.
But Gaden said Challenger, as a company, also had a big alignment of interest in the infrastructure sector.
“Whatever we offer [to clients], we own some of it ourselves or we will own it on the balance sheet. We share in their upside or downsides. The pain or the pleasure is shared by Challenger,” Gaden said.
Because infrastructure is generally a yield-generating asset class, Gaden believes it can be used as part of the defence component within an investor’s portfolio.
“[Infrastructure products offer] yield, growth, long-term predictable cash flow and the ability to execute,” Gaden said.
Gaden indicated that for Challenger, investment in infrastructure is a long-term strategy.
“[Challenger has a] long term strategy of $4 billion annuity north of 10 years,” Gaden said.
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