Infrastructure
The bedrock of prosperity
Decades of underinvestment have created significant demand for infrastructure development and construction. The private sector will be at the heart of these efforts, creating exciting opportunities for investors.
Why invest in 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.
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 substantially.
In acting to address these trends, public authorities are creating strategic opportunities for equity investments in the infrastructure sector.
Growth spurred by large spending programs
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. Additionally, new technologies – communications, electric vehicles – and new challenges – climate change, urbanization – create immense demand for new investment. The Inflation Reduction Act in the US and the RePowerEU program proposed by the European Commission represent ambitious legislative measures that we believe will have a profound impact on all industries over the next decade and beyond, accelerating the transition to renewables and hydrogen.
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. The private sector will be at the heart of these efforts, creating exciting opportunities for investors in the companies positioned to benefit.
Our infrastructure investment fund
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 allocation2 and rigorous bottom-up fundamental analysis3. The investment universe encompasses companies that provide the facilities and services necessary to maintain and develop modern infrastructure, and also includes companies supplying infrastructure-related products and services.
The strategy tends to have a bias toward underlying sectors such as utilities, midstream energy, communication, and transportation, which results in a lower beta4 versus the broad equity markets.
The fund applies exclusions and integrates ESG5 considerations into the investment process following the principles of the Credit Suisse Asset Management’s Sustainable Investing Policy.
Risks
- Equity investments do not offer capital protection. Investors may lose all or a part of their investment in this product.
- Geopolitical developments or changes in regulations may have a significant adverse impact on the underlying investable universe and portfolio investment.
- Many infrastructure companies have high levels of debt resulting in higher risk related to gearing than most listed companies.
- A higher concentration in specific sectors can cause performance to deviate significantly from broader market indices at certain points in time.
- Exposure to emerging markets and commodity prices such as oil, gas, and power prices may increase volatility. Investing in emerging markets involves a greater degree of risk than investing in developed markets, while investing in commodity-related companies brings a higher degree of cyclicality.
- Sustainability and ESG considerations may have adverse impacts on stock price performance.
Investment possibilities
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The full offering documentation including complete information on risks may be obtained free of charge from a Credit Suisse client advisor, representative, or, where applicable, via Fundsearch (credit-suisse.com/fundsearch).
1Pure-play investment definition: recurring revenues from concessions, long-term contracts, or natural monopolies are essential to the business model.
2An investment approach that focuses on the analysis of macro factors of the economy before examining micro factors.
3An investment approach that focuses on the analysis of individual stocks and de-emphasizes the macroeconomic environment.
4A measure of the volatility, or systematic risk, of a single security or fund in comparison to the market as a whole.
5ESG 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 (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 in the information which is to be disclosed to investors in accordance with applicable regulations.
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