Why is global infrastructure equity your best idea?
Increasing urbanisation, energy transition, and digital acceleration are the three pivotal themes shaping future infrastructure investments.
Our global infrastructure equity strategy taps into these key areas. We embrace the next wave of innovation - encompassing artificial intelligence, the internet of things, robotics, clean technology and renewables. Our mission is to invest in companies poised to drive economic growth and deliver attractive returns for our clients.
We believe allocating to infrastructure should be a long-term, strategic decision, due to the asset class's clear performance and diversification benefits. Infrastructure assets also offer inflation protection and yield opportunities (approximately 3-4% per year).
The defensive nature of the sector also means it has the potential to continue outperforming the broader market during downturns and periods of moderating growth.
We invest in four key sectors: transportation, utilities, energy, and communication. With over $1 billion in assets and a track record of over 16 years, we aim to provide investors with a unique blend of growth, income, and inflation protection through this diversified flagship strategy.
Team and investment process
Our global infrastructure equity strategy is managed by the Global Infrastructure portfolio construction group (pod). The pod is made up of three members – Josh Duitz, Donal Reynolds, and Nick Machin. It's responsible for ensuring that the portfolio is run in line with the mandate and that it delivers against clients' return objectives.
The pod boasts a wealth of experience (60+ years) in investing, and many years of analysing infrastructure stocks. The team works collaboratively on idea generation and portfolio construction. The pod also benefits from the broader Aberdeen Investments resources available. This includes the 110+ equity team, the 70+ infrastructure team and the 30+ ESG team.
Our investment process focuses on finding undervalued high-quality companies. The pod uses a mix of quantitative and qualitative processes to identify suitable investment ideas and engage in rigorous fundamental research to assess the viability of these ideas.
The team constructs portfolios with a clear view of the client outcome being targeted using a proprietary risk tool, with the aim of delivering superior risk-adjusted returns. We employ a total return focus when analysing investment opportunities. While there are no defined limitations, the portfolio typically holds 50 to 70 positions.
What are the opportunities and risks?
The Trump tariff shock has caused global market disruption, prompting investors to seek safe-haven assets. We believe infrastructure assets, with their stable demand and critical services like utilities and telecommunications, offer resilience against economic volatility.
These real assets provide inflation protection through long-term contracts with inflation-linked pricing, ensuring secure income streams. Infrastructure assets also enhance portfolio diversification due to their low correlation with other assets. Infrastructure investments tend to be driven by unique factors such as regulatory changes and technological advancements.
Global infrastructure spending is a megatrend supported by governments worldwide, driven by demographics and the need for economic growth. Meanwhile, major investments are required in technology and clean energy sectors to achieve net-zero carbon targets.
Infrastructure equities have outperformed broader global equities over the long term, suggesting they have the potential for relative safety during market volatility. Amid the current global trade conflict, we believe infrastructure presents an attractive option for investors seeking stability and inflation protection.
Two key global infrastructure equity opportunities in our portfolio
US electricity
In the US, rising electricity demand is driven by the expansion of datacentres, which are essential for supporting AI applications and digital services.
Datacentres are projected to account for nearly half of the growth in US electricity demand by 2030, surpassing the energy consumption of traditional manufacturing sectors1.
This surge underscores the critical need for advanced energy solutions to meet increasing demand while ensuring reliability and sustainability.
Approximately one quarter of our global infrastructure equity portfolio is invested in electricity production-related stocks (typically in renewables). Half of this allocation is US-focused, including names like NextEra and Clearway Energy.
African telecoms
Africa is experiencing rapid data growth, driven by increased mobile phone usage, affordable data plans, and expanding internet infrastructure. The number of internet users has doubled in the last 5 years2.
We invest in companies like IHS, which develops and constructs telecommunication infrastructure solutions. The company plays a key role in facilitating digital connectivity for communities, primarily in Nigeria. Internet penetration in Nigeria is just 46% compared with the OECD average of 87%3, so there is a significant growth opportunity.
Similarly, we hold Helios Towers, which enables access to the internet via mobile data services for communities across sub-Saharan Africa. An operator of telecom towers, the company is broadening coverage across the region, including Madagascar and Malawi.
These two examples demonstrate the kinds of long-term growth opportunities our global infrastructure equity strategy invests in.
Final thoughts
Global infrastructure equity allows clients to invest for the future via three big long-term themes of urbanisation, energy transition, and digital acceleration. What's more, by diversifying into this attractive equity subset, clients can potentially boost portfolio resilience and add an element of inflation protection.
1 Source: IEA April 2025
2 Source: Statista - Jan 2024
3 Source: DataReportal - March 2025
