17th March, 2023
The Insider: Meet the Fund Manager sessions are a great way to hear directly from leading fund managers. They share their approach to investing, favourite companies and their market view for the year ahead.
With the recent Budget’s fillip of $4 billion, Australia has now committed to investing a total of more than $40 billion towards becoming a renewable energy superpower. The Australian Government is hoping to attract $80 billion of private and public investment on green technologies.
On a global scale, the International Energy Agency estimates that annual investments in clean energy worldwide will need to reach ~$4 trillion by 2030 in order to achieve net zero emissions by 2050.
“Infratil continues to add new renewable energy capacity to achieve that [target],” said Jai Mirchandani, a staunch advocate for environmental, social and governance (ESG) investing. “It’s a sustainable global infrastructure investment company focused on renewable energy, digital infrastructure and healthcare. This is one of our largest positions in the portfolio.”
Speaking on Reach Markets’ The Insider: Meet the Fund Manager in March 2023, Mr Mirchandani, who is the Founder and Portfolio Manager at ELM Responsible Investments, selected Infratil Ltd (ASX: IFT) as one of his favourite stocks. Watch the full The Insider: Meet the Fund Manager session.
The New Zealand-based business owns 66% of Wellington International Airport which occupies 110 hectares of freehold land and in the year ending 31st March 2022, earned NZ$1.29 billion revenue and NZ$1.16 billion net profit.
During the session, Mr Mirchandani discussed the ‘Five Dimensions of Impact’ – a methodology designed to help investors like ELM quantify the impact of companies and projects. He noted that Infratil scored high on ‘Contribution’ – one of the five dimensions that indicates the level of impact that the company delivers above a certain base level.
“Another way to think about it is to consider the level of impact that would’ve occurred anyway without this company existing. That ties in nicely with our pursuit of finding high quality companies [that] typically have products and services that are irreplaceable or hard to compete with,” he said.
Elaborating further with his investment thesis, Mr Mirchandani called out the company’s compelling valuation which he mainly attributes to the complexity of the business, the management team’s track record and what has been described as a ‘Midas touch’ when buying and selling assets, raising capital and undertaking buybacks.
“All those actions tend to be value-accretive for shareholders while being in really important industries like renewable energy, digital infrastructure and healthcare. They’ve also got a really great track record in seeding new businesses,” Mr Mirchandani said, referring to Infratil’s seeding of an Australian renewable energy platform whose subsequent sale generated an Internal Rate of Return (IRR) in excess of 30% per annum.
“They’ve recycled that capital to build a presence in South-East Asia, Europe and North America. We’re already seeing value increases occur as they bring in new investors into those ventures,” he added.
Infratil’s current global renewables platform comprises five companies operating in North America, Europe, Asia, Australia and New Zealand, all of whom are engaged across wind, solar, hydro and energy storage with 2 gigawatts of total operating assets and working on a 25-gigawatt pipeline.
Another outstanding example of Infratil’s prowess in capital management was its November 2022 sale of Vodafone NZ’s passive mobile infrastructure business for NZ$1.7 billion to global investors InfraRed Capital Partners and Northleaf Capital Partners, with Infratil reinvesting proceeds from the sale to acquire 20% of the renamed entity, TowerCo. Infratil and Brookfield Asset Management acquired Vodafone NZ in May 2019 for NZ$1.03 billion.
Click here to view more videos from Jai Mirchandani’s The Insider: Meet the Fund Manager session.
Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets’ position. Any advice contained within this presentation is general advice and does not consider your personal circumstances, you should consider whether it is appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.
Past performance is not a reliable indicator of future performance.
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Past performance is not a reliable indicator of future performance.
The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.
Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.