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Investing in unlisted infrastructure

At StatePlus we’re always looking for better ways to invest your money. This is why we’re now investing in unlisted infrastructure.

Nyngan Solar Plant

Nyngan Solar Plant, NSW. Photo: QIC Limited

What is unlisted infrastructure?

‘Infrastructure’ refers to assets that meet community, societal and economic needs. They underpin the operation of society and provide an essential service to the community.

Examples include:

  • utilities such as electricity, telecommunications, gas and water
  • transport infrastructure such as toll roads, railways, airports and ports
  • social infrastructure such as schools, hospitals and public housing.

These assets are called ‘unlisted’, because they’re held privately rather than listed on a share market. This makes them part of an ‘illiquid’ asset class, in which valuations are less volatile and the investments provide diversification for investors, particularly those with longer time horizons.

Why are we investing in unlisted infrastructure?

StatePlus is seeking the following investment characteristics from its unlisted infrastructure investments:

  • stability – stable, predictable cash flows which can also protect against inflation
  • diversification – through differentiation from traditional asset classes such as stocks and bonds
  • constant demand – as these assets provide essential services, the demand for them remains relatively stable, so they are less sensitive to economic cycles
  • consistent valuations – unlisted infrastructure is not valued daily (unlike shares and bonds), so valuations remain relatively stable.
As these assets provide essential services, the demand for them remains relatively stable, so they are less sensitive to economic cycles.

Am I invested in unlisted infrastructure?

You will have exposure to these unlisted infrastructure assets as part of your diversified portfolio if you’re invested in any of these options:

As with any investment, investing in unlisted infrastructure carries a certain amount of risk, which is balanced with the diversification benefits it offers for the StatePlus portfolio.

Where we’ve invested

StatePlus has partnered with QIC, one of the largest wholesale investment managers in Australia. We currently have unlisted infrastructure investments in:

The Port of Melbourne

A critical gateway

The Port of Melbourne is the largest container port in Australia, and more than a third of Australia’s total import and export container trade goes through it. The port is centrally located near Melbourne and well-connected by rail and road infrastructure.

By providing a critical trade gateway into and out of Victoria, the port provides an essential service to the Melbourne region.

Steady growth

Steady population and productivity growth have made Victoria the second-most populous state in Australia behind NSW. Container trade at the Port of Melbourne has matched this progress, even through difficult periods such as the Global Financial Crisis.

The Powering Australian Renewables Fund (PARF)

The Powering Australian Renewables Fund (PARF) is a renewable energy investment vehicle that is partnering with existing alternative energy experts.

1,000 megawatts of renewable power

PARF aims to build 1,000 megawatts of renewable power generation, through large-scale projects that use proven renewable energy technologies. The first assets are solar farms at Broken Hill and Nyngan, in outback NSW.

Equivalent to removing about 800,000 cars from the road

Once fully invested, PARF will own approximately 10% of Australia’s renewable energy capacity and will generate over 3,000 gigawatt hours of electricity. This generation will abate around 2.7 million tonnes of greenhouse gas emissions per annum, or provide power to approximately 530,000 homes. It is equivalent to removing about 800,000 cars from the road.

Aware Super Pty Ltd ABN 11 118 202 672, AFSL 293340, the trustee of Aware Super ABN 53 226 460 365. Financial planning services are provided by our wholly owned financial planning business Aware Financial Services Australia Limited, ABN 86 003 742 756, AFSL No. 238430.

This information is of a general nature only and is not specific to your personal objectives, personal situation or needs. Before making any decisions based on this information you should consider its appropriateness to you. Every effort has been made to ensure the information is accurate. We strongly recommend that you consult a financial planner before taking action and review the relevant Product Disclosure Statement.

Past performance is not an indicator of future performance and future performance is not guaranteed.