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Infrastructure

The bedrock of prosperity

Why infrastructure?

Bridges, wind turbines, power grids, telecom towers, transport facilities – infrastructure is the engine driving the global economy. After years of neglect, governments around the world are waking up to the reality that large-scale spending on modern public infrastructure is crucial to maintain growth. To meet those needs, annual infrastructure spending measured to world GDP will need to rise by 0.5% to 3.5%. G20 governments, well supported by the Biden administration and the European Union, have finally announced USD 3.2 trillion (4.6% of G20 GDP) of infrastructure investment as a stimulus.

On top, new mobility, digitalization, and primarily the climate crisis are major challenges that will shape the coming decades. Radical action is necessary to achieve climate goals, and to reach the 1.5° C target by 2050 clean energy financing must rise to USD 4.4 trillion per year. In acting to address these trends, public authorities are creating strategic opportunities for equity investments in the infrastructure sector.

The private sector will be at the heart of these efforts, creating exciting opportunities for investors in the companies positioned to benefit.

Product Specialist Carly Brewster explains our approach to investing in the infrastructure segment.

Clean energy spending: The action plan

Vertical bar chart showing spending on infrastructure needed to reach climate goals.
Source: International Renewable Energy Agency (IRENA)

With the growing need for transport facilities, climate-change solutions, smart cities, and digitalization of society, infrastructure builders and operators are positioned to thrive in the coming years. They operate in a favorable business environment:

  • High barriers to entry create natural monopolies and reduce competitive pressures.
  • Concessions from public authorities provide regulated returns with adjustments for inflation.
  • Relatively stable and predictable cash flows facilitate long-term company growth.

The need for infrastructure in numbers

The Credit Suisse (Lux) Infrastructure Equity Fund offers access to a curated universe of pure-play infrastructure1 company stocks and adds value through a dedicated investment process, including top-down sector allocation and rigorous bottom-up fundamental analysis. The strategy tends to have a bias toward underlying sectors such as utilities, midstream energy, communication, and transportation, which results in a lower beta versus the broad equity markets. Additionally, it integrates ESG2 considerations into the investment process following the principles of the Credit Suisse Sustainable Investment Framework. This makes the fund a solid pillar on which to build your investment portfolio.

The investment promoted in this marketing material concerns the acquisition of units or shares in a fund and not of any underlying assets. The underlying assets are owned by the fund only.

Statistical data describing infrastructure spending necessary to achieve climate-change targets.
Sources: Credit Suisse, Global Infrastructure Hub, World Bank

Why now?

Vertical bar chart showing the infrastructure investment gap by region in the years 2016-2040.
Vertical bar chart showing the sectoral share of infrastructure investment in the years 2016-2040.
Source: Global Infrastructure Hub

The long-standing global infrastructure investment gap is finally being tackled by governments around the world, and spending on critical public infrastructure projects is taking off.

We are in the early phase of a decade-long EU spending program to finance the green transition, announced in 2020 and worth over EUR 1 trillion,3 while in November 2021 the US government earmarked USD 1.2 trillion for infrastructure renewal.4 Travel demand is rebounding after the pandemic, fueling renewed spending on roads and airports. Exploding mobile data needs are driving large-scale communication infrastructure projects worldwide.

The private sector will play a crucial role not only in operating infrastructure assets like highways, power plants, and data centers, but also in improving inclusivity in projects and supporting green initiatives vital to continued sustainable growth. At the same time, contracts with public authorities frequently link tariffs to consumer price indices or include automatic rate increases, making infrastructure operators more resilient to inflation.

We believe that now is the time to consider how the Credit Suisse (Lux) Infrastructure Equity Fund can provide long-term value to your investment portfolio.

The full offering documentations including complete information on risks may be obtained free of charge from a Credit Suisse representative or where available via FundSearch (credit-suisse.com/fundsearch).

Risks

  • Investors may lose part or all of their investment in this product.
  • Equity market risk: The fund is exposed to changes in global equity markets.
  • Regulatory and political risk: Most infrastructure stocks are regulated and changes in the regulatory or political environment could have a significant adverse impact on infrastructure investments.
  • Many infrastructure companies have high levels of debt resulting in higher risk related to gearing than most listed companies.
  • Up to 40% of the fund’s assets can be invested in emerging markets. Political, economic, and exchange-rate risks in these countries may have a negative impact on the fund.

1 Pure-play investment definition: recurring revenues from concessions, long-term contracts, or natural monopolies are essential to the business model.
2 ESG stands for environmental (E), social (S), and governance (G). For further information about the ESG investment criteria and the sustainability-related aspects of the fund please consider the legal and regulatory documents of the fund (such as, e.g., the prospectus) and visit credit-suisse.com/esg. In addition to sustainability-related aspects, the decision to invest in the fund should take into account all objectives and characteristics of the fund as described in its prospectus, or the information which is to be disclosed to investors in accordance with applicable regulations.

This is a marketing communication.
Please refer to the prospectus/information document of the fund and to the KIID/KID (as applicable) before making any final investment decisions.

Source: Credit Suisse, unless otherwise specified.
Unless noted otherwise, all illustrations in this document were produced by Credit Suisse Group AG and/or its affiliates with the greatest of care and to the best of its knowledge and belief.

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