Why North American infrastructure investors should beware

Bertrand Cliquet, fund manager of the Lazard Global Listed Infrastructure Equity fund, explains why infrastructure asset prices in North America are materially overvalued.

In Greek mythology, the Sirens were beautiful creatures who lured nearby sailors to their death with bewitching music and songs off the rocky coast of the island Anthemoessa. In the uncertain and ultra-low interest rate environment investors’ face today, it appears the seductive song of ‘yield’ has similarly lured investors seeking bond proxies to some parts of the equity market. Beneficiaries of investors’ obsession with yield have included sectors such as consumer staples and real estate investment trusts (REITs), as well as some parts of the listed infrastructure market. In part...