Legg Mason to launch global infrastructure income fund

Legg Mason is due to launch an income-orientated, global infrastructure fund. The Legg Mason IF RARE Global Infrastructure Income Fund (‘the Fund’) will be managed by RARE Infrastructure Ltd. (’RARE’), the group’s Sydney-based infrastructure specialist. The Fund will be available to investors in the UK on-shore fund range.
This global listed infrastructure fund will target a high level of income alongside long term capital growth, and is expected to achieve a yield of c.5% p.a. (under current market conditions). The Fund will hold between 30 and 60 stocks, investing in listed infrastructure companies, including those in the energy, utilities, transport, and communications sectors, in both developed countries and emerging markets around the world.
Managed by RARE’s team of infrastructure specialists, including Co-Chief Executive Officers Nick Langley and Richard Elmslie, the Fund is due to launch in July 2016 with an annual management charge (‘AMC’) of 0.75% (X share class). The Fund will be launched with a founder’s share class with an AMC of 0.40% (S share class).
Established in 2006, RARE is one of the largest wholly dedicated asset managers in the infrastructure asset class category^[1], managing USD 6.3 billion^[2] for institutional and retail clients. The firm’s investment approach is centred on risk adjusted returns to equity (RARE) and its investment process focuses on detailed analysis of cash flows of infrastructure assets that can provide predictable, growing returns combined with underlying macro and economic valuation drivers.
Acquired by Legg Mason in October 2015, RARE provides expertise in global listed infrastructure, adding an experienced manager in a growing asset class to Legg Mason’s affiliate partners. RARE operates as a core independent investment subsidiary of Legg Mason along with eight other subsidiaries.
Adam Gent, Head of UK Sales at Legg Mason, says:
“Investors are increasingly recognising the benefits of the global listed infrastructure asset class. And, with traditional sources of yield at historic lows, now is a compelling time to launch a strategy that can offer a high sustainable income whilst also providing portfolio diversification, inflation protection, and a strong risk-return profile.
With the global infrastructure market expected to more than double in size by 2030, the asset class is a secular growth story, and the Legg Mason IF RARE Global Infrastructure Income Fund will be positioned to benefit directly from this growth by investing in strong income-paying infrastructure companies, enabling it to meet client needs for both capital returns and income.”
[1] Source: Towers Watson Global Alternatives Survey 2014. Based upon data for top 100 alternative asset managers with pension AUM. RARE ranked #8 out of 100.
[2] As at March 2016 in USD