Now, more than ever, global trends such as changing demographics, digitalisation, energy transition, infrastructure renewal and sustainable development are driving significant demand for real assets.
With heightened inflation globally, investors are looking to protect the value of their investments and to diversify portfolios amidst market volatility. In this evolving environment, there is an opportunity to connect your clients with new opportunities.
Global megatrends are shaping the real estate and infrastructure landscape, driving demand over the long term.
10b
world population by 20501
$US92-173t
energy infrastructure investment needs by 2050 in order to achieve net zero2
$US9.2t
estimated annual investment required globally in real estate to support net zero transition3
Accessed through publicly traded equities, listed real assets provide a liquid entry point to typically illiquid investments like real estate and infrastructure.
With their inflation-protection characteristics they provide potential for custom blended real asset portfolios that target specific objectives for investors.
Real assets provide the potential for meaningful diversification through exposure to distinct return drivers not found in a traditional portfolio.
A mix of publicly traded real assets can offer liquidity and diversification within an alternatives portfolio, along with positive inflation sensitivity.
Megatrends
Demographics
Growing urban centres have evolving needs. More than half the world currently lives within urban areas and by 2030 this number is expected to swell to about 5 billion. (Source United Nations Population Fund). But it’s not just about demographics. The pace, nature, and complexity of urban real estate and infrastructure is evolving too.
Communities need modern healthcare, living environments, workplaces, transportation, low carbon energy, circular economy waste management and a wide array of communication technologies and resources to support an insatiable appetite for data, among other solutions. There are more people, with a broader range of needs than ever before.
Digitalisation
Growing demand for technology and digitalisation has created the need for an entirely new class of real asset solutions in the form of data centres, fibre networks, communication channels and towers. It has also transformed how traditional infrastructure is designed and built, and how real estate is managed.
Management teams can design ‘digital twins’ to explore operating efficiencies, deploy remote sensors and drones to organise predictive maintenance, and artificial intelligence to accelerate decision making. The impact of technology on real estate and infrastructure investing is likely to continue to accelerate.
Decarbonisation
Infrastructure and real estate are expected to play a crucial role in transitioning to a net zero world, with substantial investment required to limit global warming and achieve net zero carbon emissions by 2050. According to the Bloomberg New Energy Finance (BNEF), total investments required in energy infrastructure alone could be between $US92 trillion and $US173 trillion, or between $US3.2 trillion and $US6 trillion per year.
With governments globally more indebted than ever, this means there is a need and opportunity for private capital to step in and fill the investment gap.
Drivers
Structural growth drivers and key themes in the near term
Structural megatrends are driving significant demand for real assets, creating attractive long-term investment opportunities.
Inflation and interest rates
While the global economy recovered strongly from the COVID-19 pandemic, it has since been buffeted by two major shocks including high inflation and rising interest rates globally. Investing in real assets has the potential to offer investors a hedge against heightened inflation and rising interest rates and can offer diversification benefits for a portfolio throughout market cycles.
Hear from Brad Frishberg, Chief Investment Officer, Macquarie Global Listed Infrastructure, as he discusses the opportunities from within the listed infrastructure asset class.
Join James Maydew, Head of Global Listed Real Estate, Morningstar’s Jody Fitzgerald, and Ensombl host James Whelan as they explore the new strategies required to harness the undoubted income and growth potential of this sector.
Over time, the asset class has evolved into other areas like healthcare, aged care, and digital real estate – necessity real estate”.
Why Macquarie Asset Management
Macquarie Asset Management is the world’s largest infrastructure manager^, with more than 290 million people each day relying on the infrastructure in which we invest7. Real assets are a core part of our business, with capabilities across both unlisted and listed Real Assets.
Infrastructure
World’s largest
infrastructure manager^
$A298 billion
in infrastructure assets under management4
Real estate
$A30.6 billion
in real estate assets under management5
210+
Real estate professionals in Macquarie Asset Management6
Information current as at 31 March 2024 unless otherwise noted.
^ IPE Real Assets 2024 Top 100 Infrastructure Investment Managers 2024, published in July/August 2024. The ranking is the opinion of IPE Real Assets and not Macquarie. No such person creating the ranking is affiliated with Macquarie or is an investor in Macquarie-sponsored vehicles. IPE Real Assets surveyed and ranked global infrastructure investment managers. The ranking is based on infrastructure AUM as at 31 March 2024. AUM is defined by IPE Real Assets as the total gross asset value of all assets managed and committed capital (including uncalled). There can be no assurance that other providers or surveys would reach the same conclusions as the foregoing.
4 and 5. Source: Macquarie. The Assets Under Management figures above are as of 31 of March 2024 and apply to the infrastructure and real assets management of Macquarie Asset Management Public and Private Markets businesses. 6. Real estate aligned professionals. Number of investment team professionals is 153 as at 31 March 2023 7. As of March 2024, the number of people reached is calculated by taking an estimate of the number of users for all MAM Real Assets portfolio companies.
Target investors
The Macquarie Global Listed Real Estate Fund is designed for consumers who are seeking capital growth; are intending to use the Fund as a minor allocation or satellite allocation within a portfolio; have a minimum investment timeframe of five years; have a high or very high risk/return profile for that portion of their investment portfolio, and require the ability to have access to capital within one week of request.
The Macquarie International Infrastructure Securities Fund (Hedged) and Macquarie International Infrastructure Securities Fund (Unhedged) are designed for consumers who are seeking capital growth and regular income; are intending to use the Fund as a minor allocation or satellite allocation within a portfolio; have a minimum investment timeframe of five years; have a high or very high risk/return profile for that portion of their investment portfolio, and require the ability to have access to capital within one week of request.
The Target Market Determination (TMD), available at macquarie.com/mam/tmd, includes a description of the class of consumers for whom the Fund is likely to be consistent with their objectives, financial situation and needs.