Legg Mason is to bring its first infrastructure fund to the UK following its acquisition of an Australian boutique last year.
The Legg Mason IF Rare Global Infrastructure Income fund will be run by Rare Infrastructure, the specialist asset manager bought by the US fund house in October 2015.
Rare’s co-chief executive officers Nick Langley and Richard Elmslie will manage the fund, which will aim to provide investors with capital growth and growing income, and will have a yield target of 5 per cent per annum.
The portfolio will hold between 30 and 60 stocks of listed infrastructure companies, including those in the energy, utilities, transport and communications sectors in both developed and emerging markets.
The UK onshore fund will include an annual management charge of 0.75 per cent, and will be launched with a founder’s share class charge of 0.4 per cent.
Adam Gent, head of UK sales at Legg Mason, said: “Investors are increasingly recognising the benefits of the global listed infrastructure asset class and, with traditional sources of yield at historic lows, it is a compelling time to launch a strategy that offers a high sustainable income while also providing portfolio diversification, inflation protection, and a strong risk-return profile.”
Mr Gent said that fund house expected the global infrastructure market to more than double in size by 2030, making the fund well positioned to benefit directly from this growth through investing in strong income-paying infrastructure companies.
Rare was founded by Mr Langley and Mr Elmslie in 2006. It ran an Emerging Markets and an Infrastructure Value fund, both listed in Dublin, prior to the company being bought by Legg Mason.
At the time of purchase, Mr Gent said he hoped that the two funds would eventually be available on UK platforms in order to expand their retail audience.
Mr Gent said: “A lot of clients can access Dublin funds now [via platforms] but we are looking to develop [new products] where it is appropriate.”
Platforms do not traditionally hold offshore funds in the UK according to the Lang Cat, a platform consultancy. Founder Mark Polson noted last year that technical differences and a lack of demand meant few platforms offered access to the products.
He said: “The tax systems on UK platforms are aimed at UK taxpayers, so cross-border demand [does not normally stem from] here.
“There are more natural places to go.”
