Ecofin Global Utilities and Infrastructure Trust Plc · LSE:EGL
Ecofin Global Utilities and Infrastructure Trust — Stifel Webinar November 2021
27 slides from Ecofin Global Utilities and Infrastructure Trust's conference presentation, Nov 23, 2021
Slide 1: Ecofin Global Utilities and Infrastructure Trust plc
Ecofin Global Utilities and Infrastructure Trust plc 23 November 2021 © 2021 Ecofin
Slide 2: EGL's Portfolio Manager
EGL’s Portfolio Manager Jean-Hugues de Lamaze Managing Director and Portfolio Manager Portfolio Manager, Ecofin Global Utilities and Infrastructure Trust plc and the Ecofin Sustainable Listed Infrastructure UCITS Fund. Joined Ecofin as Portfolio Manager in 2008. 32 years of experience in equities an
Slide 3: Strategy overview
Strategy overview An alternative income strategy featuring capital preservation and exposure to global growth Global Income Growth Diversified across geographies, Invested in securities with attractive Growth-oriented infrastructure sub-sectors and investment themes yields and inflation protection b
Slide 4: Characteristics of the investment universe
Characteristics of the investment universe Economic infrastructure offers unique characteristics that make it an attractive asset class for investors Essential assets Defensive profile Low volatility High barriers to entry Limited competition Secure earnings Asset-backed services Inflation indexing
Slide 5: Our investment philosophy: capturing value from the energy transition
Our investment philosophy Capturing value from the energy transition EGL’s portfolio is positioned to deliver attractive total returns by selecting the companies with the greatest exposure to secular growth trends stemming from the world’s accelerating energy transition. Total return mindset Structu
Slide 6: Our investment philosophy: ESG integration through positive selection
Our investment philosophy ESG integration through positive selection We have an unconstrained universe with no exclusion criteria. Our ESG analysis is highly stock specific and contributes toward superior shareholder returns through positive selection: invest in improving ESG profiles and avoid comp
Slide 7: The opportunity: secular growth
The opportunity: secular growth Energy transition underpins sustainable and profitable growth Infrastructure globally requires a major step up in investment as a significant proportion is obsolete, in poor condition or inadequate to cope with the rapid development of renewable energies The world tod
Slide 8: The opportunity: secular growth
The opportunity: secular growth Moving to a greener, more electric energy mix We see two main secular trends in the infrastructure space driving investments and value creation for decades to come: • Decarbonisation – the substitution of fossil fuels with renewable energy, mostly in the form of renew
Slide 9: The opportunity: enhanced returns
The opportunity: enhanced returns Dual benefit of rising commodity prices in the short term Commodity prices have increased sharply during 2021, producing a dual benefit for our portfolio companies: higher revenues and margins through higher achieved power prices, and an expanded renewable investmen
Slide 10: The opportunity: enhanced returns
The opportunity: enhanced returns Evolving business mixes drive value creation in the long run Utilities are rapidly adapting business models to a world which increasingly prioritises decarbonisation… EBITDA split by activity for European Utilities 12% 13% 11% 21% 22% 12% 10% 7% 29% 42% 44% 49% 46%
Slide 11: The opportunity: inflation hedge
The opportunity: inflation hedge Infrastructure as a source of inflation protection As owners of essential assets, listed infrastructure companies provide a uniquely attractive risk profile in times of rising inflation, often combining inflation indexing with strong pricing power and cyclical exposu
Slide 12: The valuation gap
The valuation gap Capturing value from a widened valuation gap Despite utilities’ improving growth prospects, defensive risk profile and positive inflation sensitivity, the sector has underperformed the (very strong) broad market by a substantial margin during 2021. We expect this gap to progressive
Slide 13: The valuation gap
The valuation gap Utilities relative yields: a 30-year perspective Notwithstanding its newly found growth, the utilities sector remains a source of income for many investors. The relative yields of the sector look the most attractive they have been in decades (RHS chart), and the spread to risk free
Slide 14: The valuation gap
The valuation gap Listed infrastructure at substantial discounts to private assets Competition for infrastructure assets remains strong, particularly from private investors who have consistently paid premia to listed multiples to acquire assets across nearly the entire infrastructure universe. This
Slide 15: Portfolio characteristics (31 October 2021)
Portfolio characteristics (31 October 2021) By geography (% of portfolio) 10 Largest holdings Country % of portfolio NextEra Energy1 US 5.5 6% 4% Iberdrola Spain 4.1 Exelon US 3.5 11% 39% North America Enel Italy 3.5 Europe SSE UK 3.4 UK RWE Germany 3.4 American Electric Power US 3.1 Emerging Market
Slide 16: Performance (to 31 October 2021)
Performance (to 31 October 2021) Since Since (all total returns in £) 1M% 3M% 6M% 1Y% 3Y% 5Y% Admission* Admission* % % per annum Net Asset Value 4.7 8.3 10.7 27.3 62.4 76.4 79.3 12.1 Share Price 1.6 7.0 9.1 26.3 80.5 102.3 123.7 17.1 S&P Global Infrastructure 1.9 5.5 4.6 20.7 19.0 21.3 24.4 4.4 Ind
Slide 17: Summary
Summary Ecofin has a long and successful track record investing in global sustainable listed infrastructure. Since Since (total return, GBP) 1 Year 3 Years admission admission We identify superior risk/reward opportunities as specialists, % p.a. with a unique focus on identifying utilities in transi
Slide 18: Investment Week 2021 Winner
INVESTMENT. WEEK 2021 WINNER ecofin 7
Slide 19: Appendices
ecofin Appendices 19
Slide 20: Investment team
Investment team STRATEGY INVESTMENTTEAM RISK Jean-Hugues de Lamaze Matteo Rodolfo, CFA Gilles Schlutig, CFA Managing Director, Senior Portfolio Manager Investment Analyst Head of risk – Listed Ecofin 31 years experience strategies Joined Ecofin 2008 5 years experience 18 years experience • Co-founde
Slide 21: Listed infrastructure investment universe
Listed infrastructure investment universe North Latin Inclusion criteria: Universe overview Europe APAC Total America America No. of companies 139 90 132 34 395 Market cap >$500mn Market cap. ($ ‘000) 2,024 1,017 697 109 3,847 Average daily volume >$1mn 21
Slide 22: Investment process
Investment process Qualitative analysis Qualitative Quantitative • Global perspective on structural trends Analysis Analysis • Local in depth regulatory analysis • Regular strategic and outlook reviews with company management • Positive selection based on forward-looking ESG implementation • Total r
Slide 23: Portfolio construction
Portfolio construction 395 companies Investment Universe Global footprint, developed markets focus $3.8 trillion market cap, highly liquid Global perspective: secular growth from energy transition Macro Analysis Local expertise: stable regulatory and policy frameworks House view on commodities, infl
Slide 24: Carbon performance
Carbon performance Emissions performance of EGL’s portfolio (by Ecofin Advisors Limited with CarbonAnalytics) • Electricity generators in EGL’s portfolio generally have CO2 emissions which are significantly below the average emissions of their relevant electricity grid and the companies sitting in t
Slide 25: Contact details
Contact details Ecofin Advisors Limited Burdett House 15 Buckingham Street London WC2N 6DU United Kingdom Tel: +44 20 7451 2929 Elspeth Dick, CFA Michael Hart Investor Relations Marketing +44 20 7451 2921 +44 20 7451 3023 edick@ecofininvest.com mhart@ecofininvest.com 25
Slide 26: Disclaimer
Disclaimer This document is being issued in relation to Ecofin Global Utilities and Infrastructure Trust plc (“Ecofin Global”) by Ecofin Advisors Limited (the “Investment Manager”) which is authorised and regulated by the Financial Conduct Authority. This document does not constitute or form part of
Slide 27: www.ecofininvest.com
www.ecofininvest.com
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