The Legg Mason Infrastructure Debt Fund will be managed by Ian Justice, portfolio manager of one of the firm’s global fixed income subsidiaries Western Asset Management.
It will invest in publically-traded debt securities issued by leading infrastructure businesses, which by nature provide frequent, inflation-linked revenue streams and strong asset backing over the long term. It is targeting institutional investors.
The fund will access a wide range of issuers across different industry sub-sectors and domiciles, and at least 75% will be invested in core infrastructure debt securities in Europe. A maximum of 25% will be invested in non-core securities, and debt issued by global businesses in Asia, Australia and the Americas.
Mike Zelouf, head of Europe, Middle East and Africa at Western, said: “Investment in infrastructure has traditionally been associated with direct equity investing and with private placement loans or mezzanine debt for the financing of specific projects, but the rising demand for infrastructure spending and reduced bank and government financing will see more debt issued in the public markets. The fund can be complementary to such private investment channels, as it offers greater liquidity and transparency without compromising value.
“With an estimated US$57 trillion required in infrastructure investment just to keep pace with projected global GDP growth between now and 2030, the opportunity for investors in this asset class is clear. The risk/reward profile of infrastructure debt is compelling and the funds will appeal to investors seeking high-quality, long-term, stable cashflows at the lower risk end of the fixed-income universe."