Professional Planner|Zenith Fund Awards 2015 – infrastructure
Winner: Magellan Asset Management
Zenith says: Magellan’s high-calibre investment team and detailed investment process have contributed strongly to its success. Magellan employs an investment process that is founded on robust principles and that seeks to stringently define infrastructure to ensure a true-to-label offering. Zenith continues to have a high regard for lead portfolio manager Gerald Stack. Magellan has successfully generated strong alpha over the past 12 months, with notable outperformance relative to the benchmark. Sophie Gibbons, investment analyst
Zenith sector review: The infrastructure sector remains highly competitive, comprising a number of high-quality active managers. While the sector has demonstrated strong performance spanning several years, recent performance has been weaker, following broader market turbulence. Despite the broader market weakness, high-quality active managers have continued to generate alpha and display defensive characteristics, which have mitigated drawdowns in line with the benchmark.
Gerald Stack, head of investments and portfolio manager (infrastructure), Magellan Asset Management (pictured): There are two different things going on when people invest in infrastructure, in terms of the underlying results of the companies and what the market is willing to pay for them. Sometimes the market volatility may mean that you see some volatility in the listed returns, but perhaps the more important question is what’s going on at a base level. Because if you are a believer that ultimately market price reflects underlying cash flow, then if cash flow continues to be generated in a very reliable manner then ultimately price will reflect that. Over the past year, and indeed over the past five years, and indeed probably over the past 10 if I want to go [back] to pre-GFC, we’ve seen incredibly robust and stable results out of infrastructure companies and assets over that period. None of us want to live through the GFC period again, but what it did was prove the thesis that these assets produce incredibly robust, reliable returns. And we continue to see that.
