Mukesh Malholtra attends SPS conference on ESG and sustainable investing for pension funds​

On 10th May 2018, Mukesh attended this conference in London.

Quoted infrastructure again

In a blog a few months ago I noted that some quoted infrastructure funds were trading at unprecedented discounts to NAV after the collapse of Carillion.  Since then they have recovered to zero or small premiums, but are still offering an inflation-correlated income stream of around 6% more than the risk free rate (index linked gilts).  I’ve recently been engaged in a gentle debate in the FT comment columns on what happens to investor returns in the very long-term.   Beneath the bonnet are long-term infrastructure contracts and the funds’ published NAV is calculated from the Net Present Value (NPV) of the income streams derived from these.  When the contracts are close to term, the NPV must start to decline sharply, as they will no longer have the annuity-like payment stretching out for years.  So, unless the fund replaces them with new contracts, the NAV of its assets will also decline. In practice, the funds probably will replace them, tapping investors for money via share placements to finance new investments.  From an academic perspective, this is entirely correct, allowing shareholders to make a decision whether to invest in their new contracts.  But investors who choose not to reinvest will find themselves diluted.  For them, these infrastructure funds will bear some resemblance to a bond trading over par, effectively converting capital into income. I still believe that at zero premiums quoted infrastructure funds are an attractive asset class particularly for long term investors, who place greater value on the predictable long-term and inflation-correlated income streams they provide.  Others may attach more importance to the opportunity costs of locking in a return for a long period and find them less compelling: what happens, for example, if bond yields rise and the discount rate used to calculate their NAV rises? Please do contact us  if you have a different point of view.​

William Bourne speaks at EPFIF private markets investors forum

On 26th April 2018, William spoke at the EPFIF Private Markets Investors Forum in London. Mukesh also attended.

William Bourne attends Janus Henderson 2018 Institutional Investor Conference

On 18th April 2018, William attended the Janus Henderson 2018 Institutional Investor Conference in London.

Upcoming events

Please find below a selection of upcoming events our team members will be attending:  16th May 2018 - Professional Pensions Investment Conference - London - Mukesh attending 17th May 2018 - S&P Dow Jones Indices Seminar - Discover the ESG Advantage - London - Mukesh attending 21st-23rd May 2018 - PLSA Local Authority Conference 2018 - Gloucestershire - William attending 12th-13th June 2018 - European Money Fund Forum 2018 - London - Mukesh attending 13th June 2018 - Pinebridge Talking Breakfast - London - Mukesh attending 16th-18th July 2018 - LAPF Strategic Investment Forum - Hertfordshire  - William attending 20th September 2018 - LAPF awards dinner, London - William attending          

Learn in three minutes why the dollar will continue to fall

Linchpin Associate, Michael Howell,  speaks on CNBC on why the US$ is going to continue to decline and what that means for inflation​. Watch the video here.

Are we at peak global, and do markets care?​

Trade wars are in the headlines again, as Trump and Xi exchange threats.  For investors the big question has to be whether these will lead to a reverse of globalisation.  One commentator points out that there are parallels but also big differences with the US-Japan friction of the 1980s.  China, unlike Japan then, is an important part of the US supply chain and hiking tariffs will simply hurt US producers.  Secondly, the US has no big stick to use against China, because it doesn’t provide any form of defence shield as it did for Japan.  Thirdly, China has broader military ambitions which may create additional causes of friction. The base case has to be that Trump’s comma-head advisors head him off actually implementing his threats.  They’ve done a good job over the past 15 months but that’s no guarantee it will happen again.  I say that is the base case because it’s so clearly in everyone’s interest.  Even if this goes in a different direction, it is likely to take time to play out and increased military spending will certainly have a positive impact on some parts of the stockmarket, in Japan, the US or China.  We may indeed have reached ‘Peak Global’, but at least in the short-term trade friction is more likely to be used as the post hoc excuse for a market setback than actually be the primary cause.​


On 27th March 2018, William and Mukesh attended the Cross Pool Open Forum in London.