The asset management arm of the French bank has launched an infrastructure fund, highlighting how the asset class continues to prove a hotspot for financial markets in Europe, and beyond.

As companies expand their infrastructure investment capabilities, BNP Paribas Asset Management has launched its BNPP Environmental Infrastructure Income Fund, using the Environmental Strategies Group expertise in environmental themed investing as it continues to build out its product offering.

The fund will invest globally in listed and critical environmental infrastructure covering power and digital infrastructure, water and waste management as well as transport infrastructure. It offers clients a long-term secular theme with tailwinds from maintaining and upgrading critical infrastructure benefiting from investment programmes announced recently in Europe and the US to promote a resilient infrastructure and energy security.

With a focus on defensive listed infrastructure and attractive dividend income, the fund will focus on defensive environmental infrastructure companies that benefit from rising demand for power and related grid infrastructure; significant growth in data centres and related infrastructure; companies driving upgrades in water and waste infrastructure as well as improving global transportation infrastructure.

It comes under Article 9 of the EU’s Sustainable Finance Disclosure Regulation (SFDR) focused on critical listed infrastructure that is less sensitive to changes in economic activity and changes in business cycles, avoiding more cyclical infrastructure related to fossil fuels and more discretionary social services and infrastructure.

It is jointly managed by the co-heads of the Environmental Strategies Group, Edward Lees and Ulrik Fugmann, who both have more than 25 years’ industry experience of managing investments across power, water, waste and related infrastructure globally.

The launch of BNP Paribas Environmental Infrastructure Income Fund complements BNPP AM’s specialised Environmental Strategies Group existing range of funds that offer a range of diversified range of investment outcomes.

“With governments like Germany and the US launching ambitious infrastructure funds and acts, such as the €500 billion ($583 billion) infrastructure fund and the $2.3 trillion Infrastructure and Jobs Act, the stage is set for a new era of critical environmental infrastructure development,” Fugmann and Lees said. “Investors can capitalise on this trend through listed infrastructure, which offers a compelling combination of defensive characteristics, attractive dividend yield, earnings visibility and stability, and access to the world's leading infrastructure companies, all while navigating the complexities of ageing infrastructure in need of upgrading and replacement."

A number of companies have expanded their infrastructure investment capabilities, for instance Guinness Global Investors, which recently launched a real assets infrastructure fund, ranging from electricity generation through to "hybrid" communities for seniors in the US.