Market
Memos from Howard Marks: Ruminating on Asset Allocation
The World Is Changing
It’s Time to Consider Investing in Infrastructure
The Potential Benefits of Investing in Private Infrastructure
Infrastructure assets share several common characteristics: they provide essential services, they have high barriers to entry, and they are often backed by long-term, inflation-linked contracted or regulated revenues. We believe these distinctive features make infrastructure assets an appealing, all-weather investment choice.
Enhanced Risk/Return
Adding private infrastructure to a portfolio has historically increased overall return while decreasing risk.
Risk/Return
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Past performance is not indicative of future results. For the period January 1, 2013 through June 30, 2023. Source: Bloomberg; Burgiss. Risk is defined as annualized standard deviation. Equities represented by MSCI World Index; Fixed Income represented by the Bloomberg Global Aggregate Index; Private Infrastructure represented by the Burgiss Global Infrastructure Index. There are limitations to the data provided given limited coverage, reporting lag and different valuation methodologies. Further, private infrastructure funds that are included in the index choose to self-report. Thus, the index is not representative of the entire private infrastructure universe and may be skewed towards those funds that generally have higher performance. Over time, funds included and excluded based on performance, may result a “survivorship bias” that can result in a further misrepresentation of performance.
A Hedge Against Inflation
Infrastructure has proved to be an effective inflation hedge.
Average Quarterly Returns During Periods of Above-Average Inflation
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Past performance is not indicative of future results. For the period January 1, 2013 through June 30, 2023. Source: Bloomberg; Burgiss. Equities refers to MSCI World Index; Fixed Income refers to the Bloomberg Global Aggregate Index; Private Infrastructure refers to the Burgiss Global Infrastructure Index. The indexes are unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. See disclosures for full index definitions. Inflation is defined as Seasonally Adjusted CPI-U. Periods of Above-Average Inflation are defined as quarters where CPI was above its historical average. During the time period analyzed, average CPI was 2.63% and there were 13 such quarters.
Mitigation of Downside Risk
Infrastructure has historically performed well during times of market uncertainty.
Average Quarterly Returns During 10 Worst Quarters for Equity Markets
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Past performance is not indicative of future results. For the period January 1, 2013 through June 30, 2023. Source: Bloomberg; Burgiss. Equities refers to MSCI World Index; Fixed Income refers to the Bloomberg Global Aggregate Index; Private Infrastructure refers to the Burgiss Global Infrastructure Index. The indexes are unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. See disclosures for full index definitions.
Harnessing a Super-Cycle of Investment Opportunities
The Infrastructure Super-Cycle offers investors the prospect to capitalize on three multi-decade megatrends that are driving significant investment opportunities: digitalization, decarbonization and deglobalization.
Digitalization
Data Is the World’s Fastest-Growing Commodity
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$1 trillion+
investment opportunity
Source: Cisco, Markets & Markets
Decarbonization
The Global Shift to a Net-Zero Economy Is Underway
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$150 trillion+
investment opportunity
Source: U.S. Energy Information Administration, IEA.org
Deglobalization
The World is Rethinking Its Focus on Manufacturing, Supply Chains and Sources of Energy
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$ 1 trillion+
investment opportunity
Source: Statista, OECD.org, U.S. Department of Transportation
The Brookfield Infrastructure Advantage
Brookfield’s roots in infrastructure date back to 1899. Today, the Firm is one of the world’s largest infrastructure investors, owners and operators.
1899
The São Paulo Tramway, Light & Power Co. is founded by Canadian investors, introducing the first electric streetcars to São Paulo and Rio de Janeiro.
1912
Consolidating the São Paulo and Rio businesses, Brazilian Traction, Light and Power Co. (“The Light”) goes public on the Toronto stock exchange.
1940s
The Light employs more than 50,000 people and provides two-thirds of Brazil’s electricity.
1969
The Light rebrands as Brascan - a blending of “Brasil” and “Canada.”
1999
Brookfield begins expanding its renewables footprint. By 2017, Brookfield will be one of the world’s largest pure-play renewable power operators.
2001
Brascan closes its initial fund in 2001, setting the stage for the Firm’s transition to an asset manager.
2005
Brascan is renamed Brookfield Asset Management in 2005.
2008
Brookfield takes its infrastructure business public as Brookfield Infrastructure Partners (NYSE: BIP).
2009
Brookfield expands its infrastructure reach via the acquisition of Babcock & Brown out of bankruptcy, acquiring a $10 billion global portfolio of data, midstream, transport and utility assets.
2010
Brookfield Renewable Partners (TSX: BEP) goes public.
2023
Brookfield closes on the world’s largest closed-end private infrastructure fund, and the largest fund ever raised by Brookfield.
Our Infrastructure Investments Around the World
From first- and last-mile rail connections, to data centers across Europe and the U.S., to connecting U.K. homes to the utility grid, Brookfield’s critical infrastructure assets span five continents.
Explore some of our assets around the world on the map.
Inter Pipeline
Energy infrastructure network that transports, processes and stores commodities, delivering sources of supply to demand centers across North America.
Summit Digitel
Telecom towers in India, supporting the growth of one of the world’s fastest-growing digital economies.
GD Towers
Telecom towers in key European markets, providing nationwide 5G coverage in Germany and Austria.
AusNet
Electricity transmission network distributing gas and electricity to 6.6 million people in Australia.
Genesee & Wyoming
Regional railroads in North America and Europe, providing critical first- and last-mile connections to thousands of customers.
Isagen
Hydroelectric facilities that supply ~20% of Colombia’s electricity.
Compass Datacenters
Data centers that are developed and operated for some of the world’s largest companies.
NTS
Natural gas pipelines that provide supply to key markets in Brazil, including Rio de Janeiro and São Paulo; the pipelines fulfill more than 50% of Brazil’s natural gas demand.
Intel
A first-of-its-kind partnership with Intel to jointly fund the construction of a $30 billion semiconductor fabrication facility.
Learn More About Brookfield Infrastructure Opportunities
Learn More About Brookfield Infrastructure Opportunities
A Word About Risk
All investing involves risk. The value of an investment will fluctuate over time, and an investor may gain or lose money, or the entire investment. Past performance is no guarantee of future results.
Infrastructure companies may be subject to a variety of factors that may adversely affect their business, including high interest costs, high leverage, regulation costs, economic slowdown, surplus capacity, increased competition, lack of fuel availability, and energy conservation policies.
Assets shown are for illustrative purposes only. There is no assurance that similar investments or results will occur in the future.
Index Definitions
The Bloomberg Global Aggregate Index is a market-capitalization-weighted index comprising globally traded investment-grade bonds. The index includes government securities, mortgage-backed securities, asset-backed securities and corporate securities to simulate the universe of bonds in the market. The maturities of the bonds in the index are more than one year.
The Burgiss Infrastructure Index represents a horizon calculation based on data compiled from infrastructure funds, including fully liquidated partnerships. There are limitations to the Burgiss data provided given limited coverage, reporting lag and different valuation methodologies. Further, private infrastructure funds that are included in the index choose to self-report. Thus, the index is not representative of the entire private infrastructure universe and may be skewed towards those funds that generally have higher performance. Over time, funds included and excluded based on performance, may result a "survivorship bias" that can result in a further misrepresentation of performance.
Consumer Price Index (CPI) is a measure of the average change in prices over time in a fixed market basket of goods and services.
The MSCI World Index is a free float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets.
Investment Terms
Standard deviation is a commonly-used measure of the risk/reward profile of the risk/reward profile of traditional portfolios and broad market indices. As applied to alternative investment funds and strategies, however, these statistics may materially understate the true risk profile of an alternative investment because alternative investment funds are subject to a loss of principal which is not reflected in the standard deviation of returns, the only measure of risk used in calculating standard deviation.