- Advisers expect average client allocations to infrastructure to reach 7% by 2023
- 69% predict ‘fake’ infrastructure will drive flight to quality in infrastructure investment
- 78% recommend clients invest in infrastructure through SIPPs, and 70% through ISAs
London, 14th March 2018: IFAs predict average allocations to infrastructure will reach 7% in the next five years, according to new research conducted by Foresight Group LLP (“Foresight”), a leading independent infrastructure and private equity manager.1
While appetite for infrastructure is increasing, the study reveals growing concern among advisers of the risk of investing in so-called fake infrastructure. Two-thirds (69%) of intermediaries believe greater awareness of fake infrastructure and the collapse of Carillion will lead a flight to quality as advisers and investors take a closer look at what they are buying.
Protection against inflation and long-term positive stable cashflows were ranked as the most important factors for advisers considering infrastructure investment, followed by attractive yield and low correlation to traditional assets such as equities and bonds.
The results underlined the popularity of infrastructure as a tax year-end investment to utilise unused personal allowances. Over three-quarters (78%) of IFAs said they are recommending infrastructure investment through pension products (including SIPPS) and 70% through ISAs.
In 2017 Foresight launched its Open-Ended Investment Company (OEIC) fund of funds, FP Foresight UK Infrastructure Income Fund (“the Fund”). The Fund, which is actively managed, invests in UK listed renewable energy and infrastructure fund / investment company equities and bonds. It targets an annual income yield of 5% per annum with dividends paid quarterly and delivered tax free when held in a SIPP or ISA.
Jamie Richards, Partner at Foresight Group said: “Advisers are becoming increasingly familiar with the benefits that access to listed infrastructure can bring to client portfolios and predict that the asset class will continue to grow over the coming years.
“What’s emerged from the collapse of Carillion is a much clearer understanding of listed infrastructure and listed ‘fake’ infrastructure, comprising products that have been incorrectly badged. We expect this will encourage a flight to quality as advisers recommend opportunities that provide access to the consistent, inflation linked underlying cash flows that make the asset class so attractive, particularly in times of uncertainty when markets are rocked by volatility. As year-end approaches, we’re seeing strong interest from advisers recommending infrastructure for their clients’ ISAs and SIPPs.”
Available on a variety of platforms and wraps, the Fund has a minimum investment of £1,000, or £100 per month for regular savings, and comprises one share class for both retail and institutional investors with the option for either income or accumulation.
1Research conducted online with 73 UK financial advisers in February/March 2018
For more information contact:
Annabel Arrowsmith, Foresight Group, firstname.lastname@example.org +44 (0)20 3667 8179
NOTES FOR EDITORS
About Foresight Group LLP ("Foresight”)
Foresight is a leading independent infrastructure and private equity investment manager which has been managing investment funds on behalf of institutions and retail clients for more than 30 years.
Foresight has £2.8 billion of Assets Under Management across a number of funds, including Listed Vehicles, Limited Partnerships, Enterprise Investment Schemes (EIS’s), Venture Capital Trusts (VCT’s) and Inheritance Tax Solutions using Business Property Relief (BPR).
Funds managed by Foresight own more than 85 Solar farms around the world and 28 Energy from Waste facilities in the UK, which together have a generating capacity of over 1.2GW, enough clean renewable electricity to power more than 690,000 UK homes every year.
Foresight has offices in London, Manchester, Nottingham, Guernsey, Rome, San Francisco and Sydney.
About FP Foresight UK Infrastructure Income Fund (“FP FIIF”)
The FP Foresight UK Infrastructure Income Fund ("FP FIIF") was launched in December 2017 as an open-ended investment company ("OEIC") focusing on the UK infrastructure markets targeting an annual income of 5% for investors paid through quarterly dividends.
About Foresight Solar Fund Limited (FSFL)
Foresight also manages Foresight Solar Fund Limited (“FSFL”). FSFL is the largest of the solar focused renewables infrastructure companies listed on the London Stock Exchange in terms of operational and committed assets. Having raised £150 million at IPO in October 2013, FSFL has since raised a further £313.2 million from institutional investors and private investors, and continues to deliver its target dividend return which, for calendar year 2017, was 6.32p per share (inflation adjusted from 6.17p in 2016) with an announced target return of 6.58p per share in 2018.
The Company invests in ground-based predominantly UK solar power assets with the objective of delivering a sustainable and increasing index-linked dividend to shareholders with the potential for capital growth over the long-term.
Of the Company’s net 621MW portfolio, 475MW is operational and fully accredited, with the remaining capacity under construction.