Infrastructure securities being promoted as investment asset class in Malaysia

Infrastructure securities being promoted as investment asset class in Malaysia

By LOONG TSE MIN

PETALING JAYA: Hwang-DBS Investment Management Bhd and technical partner, Australia-based Macquarie Alternative Investments Ltd, are promoting infrastructure securities as an investment asset class.

"While there is no product as such today (in Malaysia), it is a growing asset class in the region and the world and provides a good opportunity for investors to diversify their investment portfolios while taking on much less risk," said Macquarie portfolio manager Jon Fitch at a press briefing on Thursday.

While real estate investment trusts (REITs) had some of the same characteristics, infrastructure securities were mainly linked to essential services such as toll-roads, water and power utilites or airports giving them a lower risk profile, he said.

Historically, infrastructure securities compared to conventional assets has given higher returns and lower volatility, he claimed.

"On a risk-adjusted basis, the historical return on Macquarie's universe of 700 listed infrastructure companies capitalised at more than US$3.6tril was 21.4% from June 2000 to Dec 2006."

Other asset classes such as global cash, global debt, global equities and global REITs posted returns of 2.8%, 6.4%, 2.4% and 21.4% respectively.