The global-listed infrastructure asset class dipped in December 2022 amid recessionary concerns but ended the month — and the year — materially ahead of global equities, according to First Sentier Investors’ global listed infrastructure outlook and sector review for December 2022.
According to Peter Meany, head of global listed infrastructure at First Sentier Investors, the best-performing infrastructure sectors in this risk-off environment were utilities/renewables and water/waste, which held up well as demand for defensive assets increased. Meany said utilities are positioned to derive steady, regulated earnings growth by building solar and wind farms, and by upgrading and expanding the networks needed to connect these new power sources to the end user. The Inflation Reduction Act is expected to provide greater certainty of earnings growth for U.S. utilities, particularly those involved in the transition from fossil fuels to renewables.
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