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International infrastructure LIC launched

Specialist listed investment company (LIC) provider Argo has introduced a new offering to the market, giving investors access to global listed infrastructure.

The Argo Global Listed Infrastructure company was launched last Tuesday and will draw upon the expertise of real asset specialist Cohen and Steers to manage the investment portfolio.

Argo managing director Jason Beddow said the LIC would target direct investors, including SMSF members, looking to include greater diversification within their portfolios.

“It won’t be for everyone. So for those people who want fully franked dividends and are living off that income it won’t be suitable,” Beddow told selfmanagedsuper.

“But for those people who want diversification, it’s definitely an option they might consider.

“With the structure of the Australian market, and the concentration of the banks and a few other stocks, if you’re still in the accumulation phase of your superannuation, there’s a point when you realise I do need to diversify because I’ve got too much of the same thing.

“That’s why we think it’s a pretty compelling story and the asset class globally is huge, $4.5 billion to $5 billion, so we think this is a highly scalable model that really over any time horizon we can see should continue to grow.”

He described the offering as a total return story as opposed to an income play many other LICs were providing. From that perspective, he said investors could expect to receive a 3 per cent to 3.5 per cent income return with 5.5 per cent to 6 per cent capital growth.

Cohen and Steers senior vice president Benjamin Morton said the portfolio had a number of geographical regions and sub-sectors in which it would invest.

“We can invest in anything from freight railways to other transport infrastructure, such as toll roads, airports and marine ports, as well as cell tower companies and satellite companies,” Morton told selfmanagedsuper.

“As long as they share the same characteristics and business characteristics like longevity, predictable cash flows, so typically regulated and contractual businesses.”

He stipulated there were a few geographical regions, such as Russia and India, Cohen and Steers was hesitant to invest in due to corporate governance and regulatory transparency issues.

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