The Global Infrastructure Income Fund will launch on March 23 and will be mostly exposed to US, Europe and UK equities, with its largest weighting towards the utilities sector.
Headed by Jim Wright, who joined the firm in January this year, the fund will look to cash in on an expected boom in infrastructure spending, which Citi Research predicted will rise from $2.5tn in 2016 to $4.5tn by 2030.
Wright, who previously managed a Global Duration Equity Portfolio for the British Steel Pension Fund, said: “Infrastructure assets have characteristics which make their return profile closely aligned with the needs of investors seeking long-term reliable income.
“They have regulated or long-term contracted revenues and are relatively uncorrelated to wider macroeconomic cycles.”
Wright has ensured 60% of the companies held in the new fund have underlying profits directly linked to inflation in expectation of a return to a reflationary environment.
“If you are going into a reflationary environment what is important is the pricing power of infrastructure. Toll roads, railways, they are all key inflators and this can’t be underestimated,” he said.
With an “abundance of oil and gas”, and the promises of a boost in spending from new president Donald Trump, 42.5 % of the fund will be exposed to US infrastructure equities.
Canada, the EU and the UK also feature with 16%, 14% and 9.5% of the fund exposed to each respectively.
Wright favours utilities and the fund will have a 44% exposure to the sector, closely followed by pipelines and storage, toll roads, airports, rail and power generation.
