MARKET OUTLOOK
Earnings and Infrastructure Exposure The latest earnings reports from mega-cap tech companies show continued massive spending on AI, even amid market volatility. This presents a clear opportunity in infrastructure investment. Luminate continues to lean into the Emerging Market cohort where we see the most significant earnings prowess benefitting from tech centric economies and business models. Beyond the AI buildout, long-term demand for infrastructure is driven by energy security, urbanization in emerging markets, and the low-carbon transition. Valuations are appealing, with listed infrastructure equities trading nearly 20% below their long-term average on enterprise-value-to-EBITDA multiples. Infrastructure’s Role in Portfolios Infrastructure, traditionally viewed as a defensive sector, is now central to several interlocking mega forces. It spans essential sectors such as transport, energy, telecom, digital networks, and water and waste management. Current valuations do not fully reflect its growth potential. Infrastructure's cash flows, often protected by regulations or long-term contracts that adjust with inflation, provide predictable income. This makes it a vital component in environments marked by high and sticky inflation.
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