BNY Mellon launches Boston infrastructure fund for UK investors

Head of UK and Ireland intermediary distribution at BNY Mellon Investment Management Fergus McCarthy

Mike Sheen
03 September 2018

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BNY Mellon Investment Management has opened up its US boutique The Boston Company's $1.5bn global infrastructure dividend strategy to UK investors, marking the firm's "first thematic fund launch" in its onshore range.

Managed by Jim Lydotes and Brock Campbell from The Boston Company, the fund mirrors a strategy available in the US, which since inception in 2011 has generated a portfolio yield of around 6% per annum.

The Boston Company Global Infrastructure Income fund, which has an OCF of 0.81%, aims to generate income and capital growth by investing in a concentrated portfolio of 20-40 traditional and non-traditional listed infrastructure companies globally.

It seeks to gain exposure to opportunities benefitting from economic, social and environmental demands by targeting traditional infrastructure sectors such as transport, energy and utilities, as well as non-traditional communication and social sectors such as satellites, hospitals and senior care homes.

Lydotes explained: "There is an increasing need to update aged infrastructure, invest in emerging energy technologies and support both rising and maturing populations across the world.

"This is a research-driven, risk-aware strategy that balances the need for top-tier dividend and capital appreciation, providing a unique blend of high yield and growth.

"We believe that successful global investing is achieved through rigorous research, security selection and sustainability - all characteristics that this fund encompasses."

The fund's US equivalent strategy has returned 6.5%, 7.4% and 10.4% (net of fees) over one, three and five years to 30 June respectively, according to its factsheet. Its benchmark - the S&P Global Infrastructure (USD) Hedged Index - has returned 1.7%, 5.6% and 9% over the same periods.

Head of UK and Ireland intermediary distribution at BNY Mellon Investment Management Fergus McCarthy (pictured), who spoke to Investment Week in June about the firm's plans to extend its US offerings to the UK market, described the launch as "the first thematic fund launch in our onshore range".

He added: "The lingering low interest rate environment is creating the need for viable, income generating solutions to take the place of more traditional asset classes.

"This fund is a concentrated, high-conviction global equity portfolio that aims to deliver a high yield with significantly less volatility and lower drawdown."