Schemes dodging financial woe

Brad Waring, account executive, James Brearley & Sons
Brad Waring, account executive, James Brearley & Sons
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The one area for equity investors that has been unaffected by almost every effect of the economic downturn is investing in infrastructure projects.

Funds that specialise in this sector typically buy Government owned schools, hospitals and roads and in return are offered attractive, and assured, long-term income streams backed by the state.

As the Government is increasingly constrained in its difficultly to fund the building of new public buildings, investors have stepped in to fill this gap, attracted by the reliable and bond like revenue streams offered in return. As a result, fund-raising for these UK and international infrastructure projects are on track for another record-breaking year.

For example HICL, the largest of the five funds specialising in this area, raised £167m in March and has holdings worth £1.2bn. The enthusiasm for investors to lend monies to such funds is only matched by the supply of such infrastructure projects coming onto the market, needing investors.

Such investors in recent years have gained both in terms of capital gains and high levels of income. With little outlook for significant change in the economy it would appear that there is little chance of a major disruption to this arrangement.

The sector is catching the inevitable eyes of the Treasury where these attractive levels of profits are being made, ironically, at its expense.

“Investing in stockmarket based investments may not be right for all investors. You should consider carefully and/or seek professional guidance before investing.’’

Contact James Brearley & Sons by calling (01253) 831250 or e-mail blackpool@jbrearley.co.uk.

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