Foresight launches sustainable infrastructure fund

66% of advisers expect clients’ allocations to infrastructure and real assets to increase

Foresight has launched a global real infrastructure fund with a sustainable bent to take advantage of what it sees as burgeoning interest in the asset class.

The Foresight Global Real Infrastructure fund will seek out publicly-listed companies that own and operate real infrastructure or renewable energy assets globally.

Sustainability will play a key role in the stock selection process with the fund only investing in companies that deliver a net social or environmental benefit and comply with the 10 principles of the United Nations Global Compact for business.

This whittles the investible universe down to 91 companies – from a global pool of 5,700 – that will invest in assets spanning solar power and geothermal generation plants to medical office buildings and storage facilities.

Nick Scullion, lead manager on the fund and head of Foresight Capital Management, said the firm was capitalising on growing adviser appetite for the asset class amid fears of a sustained market downturn and ongoing Brexit uncertainty.

Eighty percent of 144 advisers polled by Foresight expect to see more global infrastructure funds recommended to clients and two thirds believe clients’ allocations to the asset class will increase over the next three years, more than double the number that thought this in 2017.

The Global Real Infrastructure fund is designed to act as a “shock absorber,” Scullion said, and will provide investors with access to infrastructure assets with long-term, inflation-linked contracts and government backed cash flows as opposed to cyclical infrastructure companies.

Foresight said a model portfolio of Global Real Infrastructure fund bested the FTSE All Share Index and FTSE All World Index over the last five years, delivering higher returns with lower volatility.

The fund is aiming to produce a total return of more than 3% per annum above the rate of UK inflation.

The fund follows hot on the heels of the launch of the Foresight Infrastructure Income fund which outperformed the IA Specialist sector in its first year, returning 11.65% as the sector was down 5.05%.

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