David Leggette, CAIA, Lead Product Strategist, CBRE Investment Management joins Julie Cooling, CEO and Founder, RIA Channel, to discuss the opportunity in infrastructure and allocation strategies for today’s market environment.
The infrastructure asset class is very well positioned for the current market environment, explains Leggette. As an all-weather asset class, infrastructure has already proven the strength of its defensive characteristics, accomplishing outperformance even in a market downturn. While economic growth, inflation, and Fed tightening can be headwinds for broad equities, they are potential tailwinds for infrastructure. Infrastructure assets include transportation networks, like toll roads, railroads, and airports, as well as digital infrastructure, including data centers, cell towers, and fiber networks.
Infrastructure assets are generally monopolistic, meaning that they don’t have a lot of competition in the markets they serve. They are capital intensive, long duration, and experience consistent market demand. This demand is primarily driven by accelerating interest in renewable energy, decarbonizing the planet, and transforming the digital economy.
A global allocation to infrastructure includes inflation-protected defensive characteristics and diversifies sector exposure. Active management, as is carried out at CBRE, is integral to the attractive returns CBRE is able to provide. The MainStay CBRE Global Infrastructure Fund, offered through New York Life Investments, invests across the global-listed, infrastructure universe.
CBRE Investment Management is a global real assets investment management firm. To learn more, head here.