Regulated electric utilities are an “underappreciated” winner from the energy transition and have attractive valuations, according to Andrew Maple-Brown, Co-Founder and Managing Director, Maple-Brown Abbott Global Listed Infrastructure.
Speaking to Zenith Investment Partners in a special interview about the infrastructure sector, ESG and the energy transition, Andrew said “In terms of the outlook for growth, we believe the energy transition clearly provides a very large opportunity for new investment and that will create absolute winners. One underappreciated winner we believe are the regulated electric utilities because of the size of the opportunity.”
Andrew said the combination of very strong rate-based growth with attractive returns delivered strong earnings growth.
“The electric utilities we’re looking at are often growing earnings about 5.0%–7.0%. You add that to the dividend yield of 3.0%–3.5%. We believe that the combination of that strong capital investment growth, the favourable policy outlook, the stable, predictable returns from regulated returns . . . we believe that the valuations are attractive.”
Georgia Hall, ESG Analyst, Maple-Brown Abbott Global Listed Infrastructure, also took part in the interview, talking about the critical nature of ESG to listed infrastructure as an asset class.
“Listed infrastructure assets are long-dated assets,” Georgia said. “They provide essential services to society. We’re talking about the provision of water, electricity, energy to customers, the facilitation of transportation from A to B, whether that be toll roads, for example, and also facilitation of communications, so communications infrastructure.
“As such long-dated assets, it’s essential that they are sustainable, not only from a longevity perspective but equally in terms of their mitigating any negative impacts and contributing to a sustainable future.”
Georgia spoke about what it means for companies to move towards ‘net zero’ by 2050 – working towards reducing their emissions considerably and offsetting any further emissions and how creating accountability to meet their targets through governance, risk management and metrics was critical.
Thank you to Zenith Investment Partners for providing the opportunity to share these insights.
This content is intended to provide general information only. It does not constitute advice and should not be relied upon as such. You should seek investment advice in respect of your individual circumstances.
Andrew joined Maple-Brown Abbott in 2012. Andrew is the Managing Director of Maple-Brown Abbott Global Listed Infrastructure which he started with his partners in 2012. Before joining Maple-Brown Abbott he spent eleven years working for Macquarie Group, the remaining five years of which he spent as a Portfolio Manager within their Global Listed Infrastructure team, working in Sydney and New York. Andrew has more than twenty years of experience in financing and investing in infrastructure assets and securities. In addition to being a portfolio manager for the strategy, he is also responsible for coverage of Regulated Utilities across North America. Andrew began his career at Lend Lease and was there for five years.
Board and committee membership:
Maple-Brown Abbott Global Listed Infrastructure Pty Limited Board
Asset Allocation Committee
Andrew
Georgia joined Maple-Brown Abbott in June 2020 as a dedicated ESG Analyst on the Global Listed Infrastructure team. Prior to joining Maple-Brown Abbott, Georgia worked as a Senior Manager for two years, ESG and Corporate Responsibility at the Commonwealth Bank of Australia, where she was responsible for the Group’s Environmental and Social Policy, climate change risk analysis and modern slavery program. Before the Commonwealth Bank, Georgia led the Investment Communications team at AMP Capital and worked on the project team to divest $600 million of "unethical" holdings, the launch of a Sustainable Australian Share fund, and oversaw UNPRI reporting. She has held other roles at Ironbark Asset Management in Australia, and Wellington Management and Schroders in the UK.
Georgia
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