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EXCLUSIVE: Europe's Quaero Capital Smiles On Infrastructure

Amanda Cheesley

12 March 2024

Investors should position for a big uptick in infrastructure spending, often fuelled by governments after a period of neglect, a European firm has told this publication.

In an exclusive interview with WealthBriefing, Mark Ebert (pictured) at .

Quaero Capital Funds (Lux) – Infrastructure Securities (listed)
The fund, which outperformed the index in 2023, provides a liquid alternative to what has been traditionally the domain of private equity. It aims to provide a long-term thematic vehicle with daily liquidity for investors wanting to take advantage of the sector’s characteristics: low correlation to markets and business cycle, high correlation to price indices, diversification benefits for an equities portfolio and protection in difficult markets.

The fund aims to capitalise on the long-term impact of the infrastructure sector by supporting companies which are industry-leading on environmental and social responsibility and stewardship, or are leading to improvement, provided that they follow good governance practices. Favoured businesses are companies with long-term contracts to build, maintain and operate infrastructure in sectors such as social infrastructure, communications, transportation, energy and water/waste sub-sectors.

The fund is heavily weighted towards the US, followed by France, Spain and Canada. One of Ebert's favourite stock picks is Ferrovial, a Holland-based Spanish multinational firm which operates in the infrastructure sector for transport and mobility. The mobility and infrastructure department is responsible for managing renewable energy, sustainable mobility and circular economy projects.  

Another top stock pick is transmission and distribution asset owners: SSE and RWE. SSE is a UK utility company operating three businesses: renewable energy generation, regulated transmission and distribution networks, and flexible generation. “SSE is deploying billions of pounds' worth of capex in onshore and offshore wind farms while investing in the required transmission network. This will generate double-digit profit growth for these two highly-visible and defensive businesses,” Ebert said.

“Similarly, the German power generator RWE is poised to benefit from its installed base of gas plants that will stabilise the grid while the group increases its renewable installed base from 13 GW to >40 GW in 2030. While the near-term profit trajectory is dampened by the phasing out of their nuclear and coal assets, and the moderation of spot power prices, underlying profits are growing at a double-digit rate,” he added. German asset manager DWS is also positive about the infrastructure market in 2024. See more here.

Founded in 2005 in Geneva, Quaero Capital is an independent specialist fund management group. It offers a range of investment strategies through its Luxembourg, Swiss and Irish regulated funds as well as private equity funds investing in European infrastructure and French real estate.