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Dreyfus, CenterSquare launch Global Infrastructure Mutual Fund

Anna Lyudvig
March 31, 2015, midnight
272

Word count: 626

The Dreyfus Corporation, the mutual fund arm of BNY Mellon Investment Management, and CenterSquare Investment Management have launched the Dreyfus Global Infrastructure Fund, which provides individual investors with the opportunity to invest in the growth potential of infrastructure assets.

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The Dreyfus Corporation, the mutual fund arm of BNY Mellon Investment Management, and CenterSquare Investment Management have launched the Dreyfus Global Infrastructure Fund, which provides individual investors with the opportunity to invest in the growth potential of infrastructure assets.

The fund’s strategy seeks compelling opportunities in listed infrastructure around the world including Africa, investing in companies with the most attractive risk/reward profiles, with strong management teams investing in infrastructure assets backed by long term contracts.

CenterSquare Investment Management, the sub-adviser for the fund, is a BNY Mellon Investment Management boutique specializing in real asset investing.

The primary portfolio managers for the fund are Maneesh Chhabria, who was instrumental in the development of CenterSquare's global real estate investment trust (REIT) platform in 2006, and Joshua B. Kohn, a real assets investment specialist with more than 13 years of investment experience.

The fund does not currently hold any securities traded on African exchanges, according to Chhabria.

“However, we are bullish on the long term growth profile of the continent. As Africa continues to become further integrated with the global economy, we feel that in the long term there will be a need for private firms to further invest in African infrastructure, presenting more of these opportunities,” he told Africa Global Funds.

“Within our portfolio, we best express that growth through the telecom space, where we do have meaningful exposure. One of our largest holdings, a US telecom company with $40bn market cap, generates 22% of its global revenue from Africa. Forward estimates project a 61% CAGR in global mobile data traffic, with much of that growth in Africa, and we see significant growth potential for telecom exposure there,” he added.

CenterSquare cites a number of factors driving the need for infrastructure investment globally, including new sources of renewable energy, the discovery and utilization of new oil and gas deposits, and technological advances in communications, among others.

Underpinning the demand for these assets is a growing and increasingly urban population and an expanding middle class, adding more consumers and increasing world trade.

Kohn said: ”In terms of energy infrastructure, we are very well versed in the offshore natural gas discoveries made over the past few years, specifically offshore Mozambique and Tanzania.”

“These are world-scale discoveries, and may be an important part of the global energy value chain. Currently, however, the economics of LNG (liquefied natural gas) exports in the US, both in the Gulf Coast and the West Coast, are superior to that of East Africa, and therefore we have focused our investments in this sector there,” he added.

When speaking of risks, Kohn said, that their major concern in Africa is individual country risk tied to internal/external armed conflicts.

“Overall, we expect to be able to navigate individual country risk through adequate diversification, and we therefore do not want to own anything with a substantial amount of their business tied to one individual African country,” he said.

With developed nations looking to improve or replace aging infrastructure assets, and many emerging markets countries building out their infrastructure to grow their economies, the World Economic Forum estimates that $100 trillion will be invested in global infrastructure between 2010 and 2030.

Traditionally, most infrastructure projects have been financed by the public sector.

However, with public debt historically high versus GDP, more private capital will be required to fund future investment, giving investors increasing opportunities to benefit from an infrastructure allocation in their portfolios.

Todd Briddell, CEO and CIO for CenterSquare, said: “We expect that there will be tremendous global demand for infrastructure assets over the next few decades. The Dreyfus Global Infrastructure Fund will give investors exposure to this dynamic and expanding sector, while seeking to provide a growth alternative which may complement other equity asset classes.”

The launch of the Dreyfus Global Infrastructure Fund follows the December 2014 launch of CenterSquare's infrastructure strategy for institutional investors.

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