Legg Mason IF ClearBridge Global Infrastructure Income Fund
An income-oriented global infrastructure fund that seeks to provide investors with a high sustainable level of income alongside capital growth.
High sustainable yield
Infrastructure companies can provide attractive dividend streams as their long-term focus is to deliver essential services necessary for an economy to function. -The ClearBridge infrastructure investment team focuses on the quality of a company’s assets and the strength of regulation or contracts, which is critical to finding those companies that can generate stable cash flows and pay high sustainable dividends.
The regulatory and contractual frameworks of infrastructure industries help lead to inflation-linked revenue streams, giving the portfolio the potential to provide a hedge against inflation.
ClearBridge has a dedicated and long-established infrastructure specialist team managing listed infrastructure funds. Their unique experience across the infrastructure asset life cycle is critical in understanding the long-term risks and opportunities.
Legg Mason affiliates ClearBridge Investments and RARE Infrastructure have completed a business integration that will create operational efficiencies and growth opportunities across both firms. This means that moving forward ClearBridge and RARE will operate as an integrated investment management firm under the ClearBridge Investments brand.
First announced in May 2019, the integration will enhance the distribution, trading and scale of global equity manager ClearBridge and listed infrastructure manager RARE Infrastructure, whose respective head offices will continue to be based in New York and Sydney.
Fund Name Change
As part of the integration by the end of June 2020, the name of the RARE fund changed as follows:
Legg Mason IF ClearBridge Global Infrastructure Income Fund
Legg Mason IF RARE Global Infrastructure Income Fund
The Fund will continue to be managed in the same way with the same philosophy and process and the Sydney based investment team continues to retain full investment authority.
Why Listed Infrastructure?
The ClearBridge investment team focuses exclusively on global listed infrastructure. These are publicly traded infrastructure securities such as the shares of electricity, water, toll roads and railroad companies around the world.
Importantly, investing in the listed markets provides the flexibility to take advantage of market movements and to invest where ClearBridge, as active managers, finds value.
Listed infrastructure investors can take advantage of the attractive characteristics of the infrastructure asset class while enjoying the benefits of the listed markets such as flexibility, liquidity and lower fees.
Excluded from the investment universe
ClearBridge’s goal is to deliver a core infrastructure return to investors. The team seeks to avoid investments in infrastructure companies with high earnings volatility or less predictable cash flows. As such, ClearBridge excludes companies with the following characteristics from their investable universe:
Companies that do not own hard assets
These include service, logistics and maintenance companies.
Companies with commodity exposure
Such as independent power producers, wholesale market exposed generators and upstream oil and gas companies.
Such as telecommunication companies and utility retailers.
Due to the essential nature of infrastructure assets, demand is relatively stable resulting in lower volatility than traditional equities and resiliency of infrastructure revenue throughout the business cycle. Even at times of economic weakness, consumers continue to use water, electricity and gas, drive cars on toll roads and use other essential infrastructure services.
Stable Cash Flow
Infrastructure companies can generate predictable income distributions due to stable earnings derived from the underlying asset. Regulation and/or long-term contracts reinforce stable cash flows and capital stability. For investors, this provides excellent visibility into revenues and dividends.
Most infrastructure assets have an explicit link to inflation through regulation, concession agreements or contracts which provide inflation protection to investors
Infrastructure can act as an effective diversifier in a portfolio, given its lower correlation to traditional asset classes such as equities and bonds. This is because the underlying return streams are linked to regulatory or contractual frameworks, rather than to factors that typically drive equity and bond returns. This diversification benefit increases in times of market stress, meaning that infrastructure provides protection exactly when it is needed the most.
Infrastructure is in a multi-decade secular growth cycle. Developed countries around the world are upgrading existing infrastructure and emerging countries are creating new infrastructure at a faster rate to keep up with the demands of a growing population and urbanisation. This drives the asset base growth of infrastructure companies, which offers investors a chance to participate in a truly growing market and the potential for capital appreciation.
Investing in global listed securities gives us the flexibility to take advantage of market movements and the agility to invest where ClearBridge, as active managers, sees the best opportunities.
Philosophy and Process
Infrastructure and COVID-19 Uncertainty
The market has potentially mispriced COVID-19's impact on both earnings and the market risk premium attached to infrastructure assets.
Global Listed Infrastructure
A Differentiated Source Of Income
Global infrastructure stocks may help investors meet their income objectives in a yield-starved world.
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Meet the Team
Co-Founder, Managing Director, Portfolio Manager
Nick co-manages all Global Infrastructure Strategies. He has 26 years of investment industry experience. Nick co-founded predecessor firm RARE Infrastructure in 2006. Previously, Nick served as Principal of AMP Capital’s Infrastructure Funds Management team, where he was also the CFO of DUET, an ASX-listed investment trust with AUD 5 billion in electricity and gas assets. He was also an Associate Director, Investment Banking, at UBS and Manager, Mergers and Acquisitions, at BZW/ABN AMRO. Nick earned a Bachelor of Laws and a Bachelor of Commerce from the University of Auckland.
Managing Director, Portfolio Manager
Shane co-manages all Global Infrastructure Strategies. He has 23 years of investment industry experience. Shane joined a predecessor organization in 2010. Previously, he was Director, Infrastructure Securities at Hastings Funds Management as well as Portfolio Manager and Investment Analyst at Tribeca Investment Partners and Investment Analyst at AMP Capital Investors. Shane earned a Master of Commerce (Advanced Finance) from the University of New South Wales and a Bachelor of Business from the University of Technology Sydney.
Managing Director, Portfolio Manager
Charles co-manages all Global Infrastructure Strategies. He has 23 years of investment industry experience. Charles joined a predecessor organization in 2010. Previously, he was Director and Senior Analyst, Global Infrastructure Securities, at AMP Capital as well as Director, Infrastructure Securities at Hastings Funds Management. He was also Head of Listed Infrastructure at Challenger Financial Services Group, a Portfolio Manager at AMP Capital Investors and an Analyst and Strategist at HSBC Australia. Charles earned a Bachelor of Economics from the University of Western Sydney.
CFA, Director, Portfolio Manager
Daniel co-manages the Global Infrastructure Income Strategy. He has 13 years of investment industry experience. Daniel joined a predecessor organization in 2012. Previously, he was an Infrastructure Adviser at KPMG, where he evaluated and executed public-private partnership transactions. He was also an Infrastructure Analyst at ANZ. Daniel earned a Bachelor of Commerce from the University of New South Wales. He is a member of the CFA Institute.
The value of investments and the income from them may go down as well as up and you may not get back the amount you originally invested.
Fund Risks: The aim of the fund is not guaranteed, and may not be achieved, the fund may suffer losses and you may not get back the amount originally invested. Owing to its investment philosophy, this Fund should be viewed as a high-risk investment.
Investment in company shares: The fund invests in shares of companies, and the value of these shares can be negatively affected by changes in the company, its industry or the economy in which it operates.
Investment in infrastructure: The fund invests in shares of infrastructure companies, and the value of these shares can be negatively affected by economic or regulatory occurrences affecting their industries. Investments in new infrastructure projects carry risks where they may not be completed within the budget, agreed timeframe or specifications. Operational and supply disruptions can also have a negative effect on the value of the company's shares.
Emerging markets investment: The fund may invest in the markets of countries which are smaller, less developed and regulated, and more volatile than the markets of more developed countries.
Concentrated fund: The fund invests in fewer companies than other funds which invest in shares usually do. This means that the fund does not spread its risk as widely as other funds and will therefore be affected more if an individual company has significant losses.
Fund currency: Changes in exchange rates between the currencies of investments held by the fund and the fund's base currency may negatively affect the value of an investment and any income received from it.
Derivatives: The use of derivatives can result in greater fluctuations of the fund's value and may cause the fund to lose as much as or more than the amount invested.
Fund operations: The fund is subject to the risk of loss resulting from inadequate or failed internal processes, people or systems or those of third parties such as those responsible for the custody of its assets, especially to the extent that it invests in developing countries.
Charges from capital: The fund's fees and expenses may be taken from its capital (rather than income). This will result in an increase in income available for distribution to investors. However, this will forego some of the capital that the share class has available for future investment and potential growth.
Important Information: This is a sub-fund ("fund")of Legg Mason Funds ICVC (“the Company”), an umbrella investment company with variable capital, authorised in the UK by the Financial Conduct Authority as an undertaking for collective investment in transferable securities (“UCITS”).
Information has been prepared from sources believed reliable. It is not guaranteed in any way by any Legg Mason, Inc. company or affiliate (together "Legg Mason").
Before investing you should read the application form, Prospectus and KIID (and accompanying Supplementary Information Document). These and other relevant documents may be obtained free of charge in English from Legg Mason Investment Funds Limited, 201 Bishopsgate, London EC2M 3AB or from www.leggmason.com/en-gb.html.
UK Investors should also read the Fund's Supplementary Information Document.