The emerging requirement for new infrastructure will be a multi-decade secular story driven by three mega trends – digitisation, the rising middle class particularly in emerging markets and energy transition. So says Kempen Capital Management senior portfolio manager infrastructure Thomas van der Meij.
Van der Meij points out that investing in energy transition is not just a tick-in-the-box exercise of investing solely in renewables. “Obviously we could do that if they were attractively valued, but for us we want to see where a company is going,” he said. “They could still have legacy assets as long as the company and management team is committed to Paris,” he added. “As long as there is a clear objective to replace their fossil fuels facilities with renewable energies and significantly lower their carbon footprint and actually do better than agreed at Paris, we could definitely still invest in them,” added during a conversation with Real Asset Insight’s Richard Betts.
From a risk-return point of view, some such companies might actually be more attractively valued than some of the pure-playe renewables, he added.
Click on the video above to watch the full interview or listen to the podcast below.