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Home>Research & Insights>Fund Times>A Disciplined Approach to Infrastructure Investing

A Disciplined Approach to Infrastructure Investing

We upgraded Lazard Global Listed Infrastructure's rating to Silver from Bronze owing to its solid process and experienced management team.

Morningstar, 08/12/2017

The following is our latest Fund Analyst Report for Lazard Global Listed Infrastructure GLIFX

Lazard Global Listed Infrastructure’s Morningstar Analyst Rating has moved to Silver from Bronze because its solid process and experienced and stable management team have made it a standout performer in the US infrastructure Morningstar Category.

Warryn Robertson, assisted by John Malquiney, has led the team since 2005. This collaborative team of five has a limited hierarchy; all four portfolio managers share the same level of decision-making authority. Manager Matt Landy contributes to the team from Lazard’s New York office, overseeing the U.S. positions.

Lazard invests in "preferred infrastructure stocks," which are companies with monopoly characteristics, high revenue certainty, strong profitability, and long-life assets. This relatively narrower definition of infrastructure allows the team to focus its fundamental research to identify undervalued preferred infrastructure companies operating in the developed economies.

The resulting portfolio is concentrated. It has owned fewer than 30 stocks since 2014 and typically holds 25-50. Lazard’s conservative definition of infrastructure leads it to focus on certain sectors and regions. For example, the fund has typically owned a lot of utilities and toll roads; it also favors European firms since the global financial crisis because the managers found their valuations more attractive. Lazard's disciplined low-turnover approach mitigates concentration concerns. Long-held positions like Vinci and CSX have helped drive the fund’s strong absolute and risk-adjusted long-term performance.

This fund’s assets have grown consistently, but at an accelerated pace in the past year. The team has been more conservative about raising assets recently because of industrywide valuation concerns and higher portfolio concentration. Rising interest rates could hurt this fund as infrastructure assets tend to be rate-sensitive, but the fund also would benefit if governments worldwide were to increase fiscal stimulus.

Overall, this team has solid expertise, a disciplined strategy, and a global perspective, making this fund one of the category’s best.

Process Pillar: Positive | Tayfun Icten 08/03/2017
This fund’s team implements a sensible, consistent, and disciplined investment process. The Process rating is Positive.

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