Boutique asset manager Downing Fund Managers has launched an infrastructure fund that aims to bypass the liquidity issues associated with the sector by investing solely in listed infrastructure trusts.

Fundtruffle readers might be reminded of such a move as Foresight Asset Management has a similar fund run by Mark Brennan which was profiled here (the fund’s AUM has more than doubled since to over £700 million). Foresight’s UK Infrastructure Income Fund has consistently beaten its benchmark while also yielding 4.65 percent in the last 12 months, is there room for a similar fund?

The macro-economic conditions seem well suited to such vehicle as depending on the type of infrastructure, pricing can be adjusted for inflation. Also, while direct investment into infrastructure assets may be suited for long term or institutional investors, the close-ended format allows for easy navigating in and out of positions.

The large trusts are mentioned in Downing’s release, such as the £2.7 billion Renewable Infrastructure Trust (TRIG) and another retail favourite HICL, although both of these are present in Foresight’s product as well

The key difference seems to be what the head of Downing Fund Managers Judith MacKenzie calls ‘newer, more niche investment trusts at a low cost’ being in the fund coupled with what looks to be a more diversified portfolio. The Downing fund currently contains 39 trusts.

The firm also stated that with a shift in the government’s ambitions and economic demands, the explosion of data has opened up opportunities to invests in digital infrastructure assets. The fund is also targeting the growth in battery storage products that has risen in recent times.

Josh McCathie, fund manager at Downing, said: “Investment in this space can directly boost the country’s economy and create a platform to generate long-term, sustainable returns for investors as well as benefits for society.

“This fund offers investors the opportunity to earn attractive returns, provides diversification from traditional assets, along with a consistent income stream which is often protected from inflation.”