Manager Comment January 2019 – Listed Infrastructure Fund

In January, the Listed Infrastructure Fund had a successful month and outperformed the global equity markets. After the volatile year-end, the broader equity market eventually rebounded in the beginning of 2019. While investors remain concerned about a potential slow-down of the global economy, the moderate progress between the US and China in terms of trade agreements contributed positively to the market sentiment. This month, nearly all companies in the portfolio were up, with Brazilian equities and the pipeline sector as main drivers of the performance. The Brazilian companies Sabesp and CCR were the fund’s top performers. After an initial surge of both stocks due to the presidential elections in Q4 2018, Sabesp, a water and waste management company, kept its momentum mainly driven by the privatization study conducted by Sao Paolo state, which could allow Sabesp to focus more on profits in the future. The toll road operator CCR was able to record further increases in value as the probability of realizing new toll road concessions and renewing the existing concession without a new auction has increased. The share price of Union Pacific, the largest US railway company, also rose sharply following the appointment of a new COO. Investors responded positively to this news as he is considered an expert on Precision Scheduling Railroading, a new approach to cargo rail operations that should lead to increased operational efficiency. Finally, Williams Companies contributed positively to the portfolio’s performance. Next to the favorable development of crude oil prices, the US pipeline operator announced that a key pipeline project was put into full service. This project enables Transco pipeline, the largest-volume interstate natural gas pipeline in the US, to significantly expand its daily delivery capacity.