The fund was launched in August 2018 to invest in listed securities that derive their value from underlying real assets and targets CPI +4% over a full investment cycle. Investments can be via REITs, investment trusts or specialist companies with a focus on physical assets.
The fund:
February 2019 - Latest commentary
Transparency - Equity markets continued their recovery into February despite a mixed backdrop on the political stage. With less than one month remaining on the Brexit clock, the picture appears no clearer, yet the US-China trade negotiations seem to be progressing. Amidst this, real assets continued to perform well, and positive contributions came from infrastructure, renewables and property. Other alternatives contributed negatively over the month.
During the month we had corporate updates from a number of our renewable energy investments. The updates highlighted that it has been less windy than forecast but that higher power prices over the period have limited the impact on cash flows.
In the other alternatives, news that Airbus will end production of the A380 investors saw some turbulence in the aircraft leasing sector with concerns over demand for the plane and the impact on residual values. However, with over eight years still remaining on existing leases and a usable life of an aircraft of 25 years, the near term concerns appear a little overdone.
Activity - Two of our holdings announced plans to raise new funds to finance the purchase of new assets and pay down revolving credit facilities.