Behind the Brookfield name there is a consolidated track record of many decades in the world of private real assets. With almost $1 trillion in assets under management, the firm is one of the main players in the segment. Less known is his listed real asset business, Brookfield Public Securites (PSG), precisely the area that the manager seeks to promote at this time.
The reason? The opportunity in assessments that they currently detect. “Listed infrastructure assets move at historically low valuations on the verge of a positive turning point in both monetary policy and a gradual improvement in regulatory schemes“, warns Leonardo Anguiano, manager of the Infrastructure Variable Income team at Brookfield PSG, the listed assets division of Brookfield AM. The expert does not venture to set a date for the rate cutsbut it is clear that When they occur we can see a significant rebound in this asset class.
Attractive valuations
“Despite share price volatility, fundamentals remain robust and companies have consistently generated cash. However, Valuations of listed infrastructure have been under downward pressure on the stock market for years. In my opinion, disproportionately”says Anguiano. It is a discount that especially catches the manager’s attention because It is a market segment that has historically traded at a premium and is now at historic lows.
They are even detecting appetite on the part of institutional investors. “Sovereign funds, which have a long tradition of investing in real assets in the private sphere, have asked us about our listed strategies because they see a discount between what the market pays and how these investments are valued in their private funds,” says the expert.
A key turning point: new structural trends
The thesis in favor of the listed infrastructure market is not only supported by changes in monetary policy. In Anguiano’s opinion, it is also key the turning point that is occurring in three specific areas at a global level.
“Digitalization, decarbonization and deglobalization are three structural trends that will accompany us for the coming decades. The public sector They have realized that they need the private sector to be able to achieve the objectives set in this regard,” says Anguiano. The manager feels that there is political will to reach out to private companies, for example, in the energy sector, improving the conditions of contracts with electrical companies so that they develop the necessary infrastructure both in renewable energies and in the best and expansion of the electrical network.
Distribution agreement with AMCHOR
Recently, Brookfield PSG has entered into a distribution agreement with AMCHOR Investment Strategies for its range of UCITS funds including its listed infrastructure, real estate and renewables funds. The Brookfield PSG division has $25 billion in assets under management across its four teams (infrastructure equity, real estate equity, real estate debt and multi-asset solutions).
The PSG Listed Infrastructure team currently manages almost 5 billion, mainly from institutional mandates. However, they are confident that the double effect of attractive valuations and their distribution boost will provide growth in assets under management for the UCIT vehicle. “We believe that Our product fits well in the Spanish market, where there is a high level of knowledge in the real estate and infrastructure sectors, defends Anguiano.
Brookfield’s DNA applied to listed markets
Although the companies that are the focus of Brookfield AM’s private markets teams are different from the companies in which they invest at Brookfield PSG, the investment philosophy of the manager is shared. Anguiano defines the Brookfield style as value with a bias towards quality. His focus on good assets purchased at the right price allows them to achieve very attractive compound growth and with little risk since they are businesses with low cyclicality. If they find the right asset at a good price they will not hesitate to deviate from the benchmark index and have a Higher tracking error if necessary.
Furthermore, much of the risk the fund takes on is idiosyncratic to the companies in the portfolio. That is, they are not investments based on macroeconomic aspects or certain factors. “We are maverick-minded in areas where we believe we have an intellectual advantage. Understanding the intrinsic value of a real asset is in our DNA”, points out the manager.
