National Grid (NG) GLIO Seminar Session 3 summary

Infrastructure allocation trends and liquidity

• Long-term investment horizons reduce the need for liquidity, but it remains useful for optimization and value crystallization.

• Listed infrastructure is gaining investor interest due to liquidity, but returns have lagged other asset classes, requiring stronger storytelling and active management.

• Private infrastructure managers are increasingly exploring listed assets due to relative valuation advantages.

• Discussion on listed vs unlisted infrastructure vehicles, portfolio diversification, valuation trends, and the impact of index standardisation on investor participation.

Return dynamics and sector opportunities

• Listed infrastructure has delivered stable, low-volatility returns, but historical compounding has been lower than desired, prompting a push for more active, contrarian strategies.

• Regulatory cycles and market inefficiencies create opportunities for active managers to generate alpha by buying undervalued assets.

• New infrastructure sectors, such as EV charging, are emerging, and early investment in these trends can yield returns, though they come with higher uncertainty.

• Electrification is driving new growth and investment opportunities in renewables.

ESG and impact considerations

• ESG and impact, especially environmental and social affordability, are increasingly central to infrastructure investment decisions.

• Investors seek not just financial returns but also positive contributions to society and sustainability.