Over the 2024 calendar year, the performance of the Australian small caps market relative to both domestic large caps and global equity markets has been underwhelming. We believe there are a number of tailwinds in place as risk appetite returns to the space following a challenging few years. In our opinion 2025 has all the hallmarks of being ‘the year of the Australian small caps’.

2024 may best be remembered as the year that AI hype went mainstream. From an infrastructure perspective the key impact has been on power markets, as the challenge in providing sufficient power to support the needed growth in data centers has become very apparent.

Amid recent news headlines regarding corporate governance shortcomings at founder-led companies, the need for rigorous governance standards has never been more critical. This article outlines the key governance principles investors should consider when investing in founder-led businesses. Additionally, it addresses both the positive and negative indicators of corporate governance at founder-led businesses as well as the key areas where investors should consider greater flexibility in governance practices to preserve the advantages that exist at companies led by its founders.

Given ongoing heightened geopolitical tensions, de-globalisation, and onshoring of defence production and supply chains, we see increasing global defence spending as being a structural growth thematic. Codan Limited (CDA) is positively exposed to this theme via their expansion of communication services for military and emergency response.

Progress in managing PFAS has been delayed by fragmented efforts, unclear regulations, high costs, limited treatment options, and the need to keep customer bills low. These challenges have made it difficult for water utilities to justify and implement PFAS solutions in their filings. As detailed in our recently released white paper, regulatory developments in the US and UK have instigated a step change in water sector investment needs for PFAS monitoring and reduction technologies over the next 4-5 year

Another strong quarter and another intra-period record high for both the Australian market (S&P/ASX 300 Total Return Index) as well as the NASDAQ Composite and the S&P 500. The two major features of the market this past quarter have been the debate around the timing and size of interest rate cuts by the Federal Reserve, and the Australian reporting season.

Getting out of the office to meet management teams and conduct site tours is one of the most engaging and essential responsibilities for the investment team. Georgia and Steve’s recent visit to the 407 Express Toll Route (ETR) toll road in Toronto, Canada, reinforced our view that toll roads are more than just bond proxies; they highlight how concession infrastructure can provide exposure to economic growth and can create value even when interest rates are rising.

The Maple-Brown Abbott Global Listed Infrastructure (GLI) team has long held that data center companies do not exhibit the requisite “core” characteristics of infrastructure, namely due to lower barriers to entry, higher competition and typically shorter contract lengths relative to other “core” sectors. We believe data centers offer inadequate inflation protection, higher cash flow volatility, and better align with real estate or "core-plus" infrastructure rather than core infrastructure.

Visiting company management and touring infrastructure provides invaluable insights into management practices, highlights potential opportunities and enriches our ESG engagement efforts.