Foresight has launched its latest infrastructure investment fund, targeting the “thriving” energy sector which remains to be seen as a safe bet for the investment community.
The FP Foresight UK Infrastructure Income Fund will seek to invest in UK listed renewable energy and infrastructure fund and investment company equities and bonds, targeting an annual income of 5% per annum with dividends to be paid quarterly.
The fund was launched after Foresight carried out research among a group of over 200 financial advisers which revealed that three quarters (75%) remain ‘bullish’ about the investment outlook for UK infrastructure assets. Meanwhile the majority (59%) expect to see increasing demand amongst clients for exposure to the sector through pensions and ISAs over the next five years.
It also found that infrastructure is poised to become an increasingly popular asset class for investors as it addresses a number of headwinds facing client portfolios. Foresight’s research found these to be volatility, expressed by more than half (56%) of advisers, a market correction (49%), inflation (42%), and interest rate rises (28%).
A third (32%) of the advisers were said to be looking to increase their clients’ allocation to the asset class over the next three years.
Philip Payne, director of Mulberry Wealth Management, commented: “Infrastructure has historically been regarded as the domain of institutional investors. However, we have found the asset class becoming increasingly attractive for our clients as more opportunities open up.
“Investors find the predictable revenue streams and stable returns compelling, particularly in times of uncertainty when markets are rocked by volatility. Foresight has a strong track record of innovation and infrastructure investment and we expect our clients will find the Fund’s target yield of 5% particularly appealing”
The investment platform also hopes to capitalise on what it sees as the continued interest in renewable energy projects due to the stable and predictable demand, the high barriers to entry and long term contracted revenue streams.
Foresight added that listed renewable energy and infrastructure funds, and investment companies, also benefit from protection from inflation as a high proportion of underlying asset revenues are directly linked to inflation.
Jamie Richards, partner at Foresight, said: “The new FP Foresight UK Infrastructure Income Fund enables investors to capitalise on a thriving energy sector, which offers numerous investment opportunities across generation, transmission and distribution technologies. The global decarbonisation agenda will lead to a growing reliance on renewable energy, which is becoming cheaper to produce and easier to store.
“At Foresight, we have a specialist focus on energy infrastructure combined with a tradition of innovation in creating investment solutions that respond to investors’ needs.
“We’re excited to be launching this infrastructure income fund which we expect to have broad appeal.”