Globally, trillions of dollars in sustainable infrastructure investment will likely be needed to provide clean, safe, and high-quality water, energy, and food to the world’s population in the coming years. While we have not found many institutional quality managers in the infrastructure space with expertise in climate and ESG analysis, KBI Global Investments (KBIGI) have stood out to us as a longstanding specialist in this field.
Exposure to listed infrastructure often comes in the form of investments such as MLPs, which primarily invest in traditional midstream energy, and are not aligned with the goals of Gitterman Asset Management’s SMART Climate Portfolios, but we have found KBIGI to be of interest in that they are an institutional global manager with an experienced team of ESG and climate focused infrastructure investors.
In 2000, KBIGI was one of the earliest investors to recognize the alpha potential of investing in solutions to water scarcity and provisions for renewable sources of energy. Their continued focus on secular investment themes has enabled them to build intellectual capital within the environmental sectors that they leverage across their platform. KBI invests in listed infrastructure, which offers many potential benefits to investors, including diversification across sectors and geographies at lower costs compared to many private alternatives, while investing in sectors that are uncommon in traditional infrastructure strategies.
Specifically, KBI invests in three themes: energy solutions, water, and agribusiness, and the cornerstone of their strategy is the sustainable nature of infrastructure investments. Their portfolio delivers material and diverse exposure to water and clean energy infrastructure, food storage, transportation, and farmland. This infrastructure need is well recognized by U.S. lawmakers with the passage of the Inflation Reduction Act, which will ultimately unlock hundreds of billions of dollars in incentives and tax credits for e-vehicles, renewables, and sustainable infrastructure. [1]
The KBIGI team has been managing specialized sustainable infrastructure investments in water and clean energy since as far back as 2001, and food since 2008. If you would like to learn more about KBIGI, and how we incorporate them into our UMA and thematic SMA solutions, we would look forward to speaking with you.
As a reminder, each quarter, Gitterman Asset Management’s Investment team, led by our Director of Investments, Jessica Skolnick, CFA, produces a quarterly market outlook to address the latest macroeconomic trends and sustainability issues facing investors and advisory firms today. We invite you to join us as we highlight the most important current events and economic indicators influencing our view on the economy, markets, and sustainability issues.
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Tuesday, April 25, 2023
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[1] https://www.mckinsey.com/industries/public-and-social-sector/our-insights/the-inflation-reduction-act-heres-whats-in-it
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