Infrastructure is seen as a diversifying asset class which can compliment equities and bonds. The aim of the Gravis Fund is to deliver a net income of 5% per annum and preserve capital. The fund focuses on the UK and is effectively a fund of funds, investing in closed ended infrastructure funds like 3i, Renewables Infrastructure Group Ltd etc.
The majority of returns will come from the income. They feel confident on what the fund can deliver and when it might struggle. If the UK enters a rapid rate hike, then this will damage returns. If rates went up to 5% then investors should avoid the fund. They think long term rates will settle around 2 to 3% and this should be okay for returns….read more