Infrastructure companies provide the structural framework society needs to operate effectively. This underlying structure is typically capital intensive and comprised of a network of hard assets. We seek to identify high-quality companies that provide financial strength and the opportunity for growth. Our portfolios include diversified infrastructure, utilities, midstream energy, and diversified energy approaches.
Infrastructure companies are positioned to provide:
- Income and growth of income—The stable cash flows that are typically generated by infrastructure companies enable a return of capital to shareholders. Superior yield and dividend growth versus the broader market create a compelling income solution for investors, in our view.
- Less sensitivity to the business cycle—Regulated business models aim to provide returns in excess of the cost of capital. With earnings often linked to its asset base, the deployment of capital is typically lower risk. Non-regulated business models tend to have inelastic demand, long-term contracts, and diversified end user bases that reduce cyclicality. Infrastructure tends to have lower beta and better downside capture than the broader market.
- Inflation protection—Infrastructure companies can often offset inflation through regulated cost recovery, contractual revenue escalators, or by exerting pricing power.
- Portfolio diversification—Infrastructure may be underheld in a market that is increasingly top heavy and dominated by mega-cap stocks. Limited overlap and more modest correlation with the broader market provide additional diversification.
Adam Fackler, CFA
Chief Investment Officer
Chief Investment Officer
“Miller/Howard launched our first infrastructure portfolio following our landmark 1989 study showing the long-term appeal of utilities as an asset class. We were also early investors in pipelines that support America’s energy industry, and telecom infrastructure, without which the modern digital economy couldn’t exist.”
John R. Cusick, CFA
Portfolio Manager
Portfolio Manager
“We seek to construct a portfolio of high-quality companies, by undertaking bottom-up research, that helps us understand not only the drivers of the business but also risks that could jeopardize the distribution.”
Adam Fackler, CFA
Chief Investment Officer
Chief Investment Officer
“Infrastructure companies offer a number of unique benefits to investors. They tend to be defensive in nature, and have generally stable, predictable cash flows, often linked to inflation. They feature durable business models, high barriers to entry, and long-lived, recurring revenue.”
