Quite suddenly, companies are seeing the non-adoption of AI as a commercial risk not evident a mere matter of months ago. As AI-related opportunities arise, we are aware of the need for boards to respect the potential risks inherent in evolving AI technologies and for governance frameworks to commensurately evolve.

From the continuing roll-out of spectrum and 5G to use cases for generative artificial intelligence (AI), investors are feeling energised about the growing need for digital infrastructure in the years ahead. Our team recently spoke with leading digital infrastructure providers and telcos about investment prospects in the dawn of the AI revolution.

The Australian listed healthcare sector includes several high-quality companies which have experienced strong growth over many years. Maintaining high levels of growth from such a high base presents an increasing challenge. With higher interest rates, elevated gearing and valuations still at a significant premium to long term averages, we remain cautious of paying too much for perceived defensiveness.

We believe the tide has turned in uranium and we are entering the next nuclear renaissance. Industry fundamentals are improving at a rapid pace, with increasing policy support from governments, a re-contracting cycle by western utilities, and a supply side not yet incentivised to significantly increase production – all of which sets the stage for a positive medium-term outlook.

In December 2021, we published our inaugural Maple-Brown Abbott Global Listed Infrastructure Task Force on Climate-related Financial Disclosures (TCFD) report as part of our firm-wide commitment to climate change risk reporting. Building on that report, this article summarises the finings of our latest climate change scenario analysis and provides an update on our targets and metrics.

As the tidal impact of higher interest rates and tighter lending standards takes hold, we have seen little to dissuade us that we are living through a period of decisive change.

Australian small caps is a volatile asset class and one for the long-term investor. With recent offshore bank failures and some concerns creeping into credit markets globally, balance sheets and cashflow come into focus, especially at the smaller end of the market where many companies still require funding for growth plans. While we don’t make macroeconomic calls and are by no means suggesting that there will be further issues to come, it is worthwhile exploring how Australian small cap companies are positioned if there is to be another banking crisis, by examining lessons from the Global Financial Crisis (GFC) in 2008.

For any student of economic history, it’s self-evident that economies and markets move in cycles. While this reality appears obvious, the elongated cycle that endured over the past decade may have caught investors in an illusion that this decade may revert back to the ‘good times’ – that market price weakness is short, temporary and likely to see another elongated bull market ensue. We remain cautious on retailers but nonetheless find opportunities in select consumer names with a favourable customer base that is, for the most part, insulated from the effect of interest rate increases.

Our recent meetings with the management teams of Australia’s large iron ore producers have allowed us to gain insights into the fascinating dilemma emerging in the global iron ore market. Right now, market forces remain finely balanced. On one hand, China’s abrupt change in COVID policy sets the stage for a substantial pickup in steel demand. Will China kick-start an economy slowed by recent lockdowns in the same way they have in the past – through steel-intensive infrastructure spending? Or will they be more resolute around their longer-term desire to transition the economy to one based more on services, allowing primary industries like steel to slow?