An interview with Jeremy Anagnos, Portfolio Manager of Nordea’s
Global Listed Infrastructure Strategy

Covid-19, trade-wars, elections—today’s market seems to be in a continuous state of flux. Portfolio Manager Jeremy Anagnos talks about a strategy that weathers the storm by taking a long view.


  • Covid-19 is disrupting the markets. How do current events like this affect your strategy?

    Infrastructure assets are essential and part of our daily life – turning on the water for brushing our teeth, tuning on the lights, using our cell phones and driving to work. Moreover, the assets have long lives, think 30-120 years, are typically monopolistic and are subject to regulated returns or long-term contracts. In general, that means that their demand is relatively inelastic. Issues related to the macro environment typically have no lasting impact on the long-term cash flow profile of the assets.

  • Which sectors do you focus on when selecting holdings for your strategy?

    We focus on targeting sectors and sub-sectors where regulation is supportive of investment, fundamentals are stable or improving and valuations are attractive on a risk-adjusted basis. Many of the themes that we are targeting today are global, including decarbonization and the need for investment in clean energy, as well as data growth and the demand for communication infrastructure assets.

  • Do you look at specific regions or countries when making selections?

    Sector allocation has been an important driver of the performance of our strategy in the long-term, contributing to our relative outperformance. Country selection is less important as not all countries offer the sector exposures we are targeting. The infrastructure market consists of four main sectors (transportation, utilities, communication and midstream infrastructure), with multiple sub-sectors in each main sector.

  • What was the most recent change in sector allocation in your strategy? Why?

    In the past year, we have increased our allocation to communication infrastructure and utilities investing in renewable energy. These investments have increased our exposure to the U.S., as well as parts of Europe. The global ambition to reach net-zero carbon by 2050 will only be possible if the world significantly reduces its power generation dependence on coal fired generation. Utilities are leading this effort through their investments in renewable generation assets, battery storage, smart meters, transmission and overall grid modernization. This is a decade long-investment need.

    Communication companies provide the infrastructure, like towers, fiber networks, and data centers , to facilitate the rapid growth in data transmission, processing and storage. The largest communication infrastructure companies are in the U.S., but we also invest in companies operating in Europe and Asia.

  • Which countries and regions are showing potential right now?

    Infrastructure investing requires a long-term perspective. The assets have long-lives, the development of assets takes years and the themes driving the growth of the assets are considered in decades, rather than months. We believe that the investments we have today will have lasting potential.

  • Are there particular countries or sectors that you will reduce your exposure to this year?

    Long-term drivers of infrastructure assets are not really impacted by macro events. However, themes around ageing assets, global decarbonization and data growth are secular, and our forecasts for these companies has not changed.

    Some sectors are more exposed to short-term demand trends, with the Transportation sector and Midstream sector the most exposed. Airport and passenger railroad stocks we see as most exposed sub-sectors. Midstream has some exposure, although with long-term contracts, the impact is mostly sentiment on our holdings.

    We have reduced our exposure to some of the more vulnerable sectors. Overall, we see the sell-off in February on long-duration, core infrastructure assets with secular demand and growth trends as overdone. Given the decline in bond yields, infrastructure is trading at its cheapest level relative to Baa Bonds over the past decade. Infrastructure’s essential characteristics are poised to lead to better performance as economic conditions continue to deteriorate over the next several months.