Kensington Investment Group has announced the launch on June 29 of the Kensington Global Infrastructure Fund to its family of funds, set to launch on June 29, which seeks to offer exposure
Kensington Investment Group has announced the launch on June 29 of the Kensington Global Infrastructure Fund to its family of funds, set to launch on June 29, which seeks to offer exposure to a portfolio of exchange-traded companies around the world and is billed as the first fund of its kind in the US.
The portfolio will be benchmarked against the S&P Global Infrastructure Index, which tracks leading infrastructure companies involved in the energy, transportation and utilities sectors in both developed and emerging markets. Kensington has expanded its definition of the asset class to include communications, social services and companies involved in the construction and financing of infrastructure projects.
Kensington notes that infrastructure has long attracted international private equity investors and pension plan sponsors, who are drawn by its competitive returns, moderate volatility, low correlation to other asset classes and growth potential. Merrill Lynch forecasts that emerging market infrastructure spending over the two years to 2009 will exceed USD1trn.
Portfolio manager Joel Beam says: ‘We see infrastructure investing as a logical progression for our clients and for us as a team. With its historical return profile and powerful secular trends serving as catalysts, we expect that over time, infrastructure could become a cornerstone of investment portfolios.’
The privatisation wave that swept Europe, Canada and Australia over the past few decades is now taking hold in the US, with infrastructure assets previously once financed and operated by government bodies, such as the Chicago Skyway Toll Road and Dulles Greenway, now leased and operated by private entities.
Rreef Research recently reported that over the past 15 years, more than 100 countries worldwide have undertaken privatisation of state-owned enterprises, with total generated proceeds estimated at USD735bn.
‘Growing interest in privatisation of infrastructure assets is not an accident,’ said John Kramer, Kensington’s president and co-chief investment officer. ‘As urban populations swell and globalisation demands that businesses compete internationally, governments are seeking new sources of capital to fund infrastructure projects as a means of driving economic and productivity growth.’
Kensington Investment Group uses a team-driven investment management approach. Kramer and co-chief investment officer and Paul Gray oversee investment strategy and policies, while Beam and senior analyst Aaron Visse are responsible for day-to-day implementation of the Global Infrastructure Fund’s strategy and stock and sector weighting decisions.
The fund is available through financial advisors in A, B, C and Y shares. It joins Kensington’s existing mutual fund offerings, including the International Real Estate Fund, the Global Real Estate Fund, the domestic, blue chip-focused Real Estate Securities Fund, the core-plus Strategic Realty Fund and income-driven Select Income Fund. Kensington’s investment strategies are also available to institutional investors via separately managed accounts.
Based in Orinda, California, Kensington Investment Group is an investment manager specialising in real estate, infrastructure and senior securities. Founded in 1993 by principals who have managed portfolios together since the mid-1980s, Kensington applies a fundamental, value-driven investment methodology to industries that generate stable, growing income streams and offer the opportunity for long-term growth.