There are a broad range of assets that can be labelled infrastructure and a number of ways to invest in the asset class. For example, vanilla equity in the owner or operator of the asset(s), equity in special purpose asset financing (PFI, PPP or leasing models) or debt (bonds, mezzanine, etc.). This paper examines the investment characteristics of the UK listed infrastructure investment trust (LIT) sector on a standalone basis and in comparison to ATLAS’s investment universe and considers:
- Which UK LITs should represent potential investments for Institutional investors seeking infrastructure equity characteristics based on the following considerations:
- Do the underlying assets display the required infrastructure characteristics?
- Do the holding companies have sufficient size and liquidity to be a meaningful part of a portfolio?
- In particular for the UK LITs, where do PFI/PPP structures sit in the Infrastructure asset class – are they more equivalent to equity or debt?
- How do the particular corporate and governance structures of UK LITs impact potential risk and returns for investors? How does this differ between the infrastructure/PPP LITs and the renewable LITs?
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