Jean-Hugues de Lamaze, manager of the Ecofin Global Utilities and Infrastructure Trust, has identified ageing infrastructure as a key area for investors. He stated that infrastructure, including energy networks, pipelines, bridges, roads, and airports largely built in the 1950s, '60s, and '70s, is becoming obsolete.
De Lamaze noted that capital expenditure on infrastructure has fallen to approximately 2.5% to 3% today, a decrease from levels that were twice as high a few decades ago. This decline has created a need to replace existing infrastructure.
Further opportunities are emerging from the demand for power for AI datacentres and electric vehicles, alongside a broader electrification of the energy industry. De Lamaze highlighted that major countries, including the UK, are struggling with power generation resources. The UK, which relied on coal for 50% of its electricity 15 years ago, now uses none and has not invested in nuclear power, leading to increased reliance on intermittent sources like wind and solar.
He also suggested that firms in water and waste management services, such as Veolia, could offer investment prospects due to water scarcity in urban areas globally. Additionally, toll roads, like those in France where prices reportedly increased from €5 to €5.30, may provide an inflation pass-through revenue.